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Why homebuyers want NBCC and not Suraksha to take over Jaypee projects

Want a forensic audit into the affairs of JIL since its inception, NBCC must pay a delay compensation under RERA norms and that no private service provider’s portal be used for voting

Almost a week before lenders of embattled firm Jaypee Infratech meet to discuss queries on the interim plans submitted by NBCC and Suraksha Realty, homebuyers have written to the authorised representative at the committee of creditors (CoC) requesting for NBCC’s bid to be put to vote first and sought more time for the voting process in case the resolution plans fail to garner the requisite threshold of 66% under the Insolvency and Bankruptcy Code, 2016.

The meeting of Jaypee Infratech's Committee of Creditors (CoC) to discuss queries on the interim plans submitted by NBCC -- the government's construction arm -- and Suraksha Realty is expected to take place on November 28, sources have said.

Lenders of embattled firm Jaypee Infratech are planning to start voting on the final bids to be submitted by NBCC and Suraksha Realty by December 8. Voting on the plan is likely to end on December 11, sources have said.

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Homebuyers of nine registered associations, through their lawyer, have written to their authorised representative Kuldeep Verma, to put forth their suggestions before the CoC meeting on November 28.

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The CoC dated November 18, 2019, provides a model timeline for the 45 days, basis which the Interim Resolution Professional proposes to complete the CIRP of JIL. In such a model timeline, the IRP has suggested the duration of December 8, 2019 and December 11, 2019 to be utilised for voting on the final resolution plan, the letter says.

“The Associations wishes that you seek modification of the timelines to the extent, wherein it makes provision for voting on the second resolution plan, in case the first resolution plan, being put to vote, fails to garner the requisite threshold of 66% under the Insolvency and Bankruptcy Code,” 2016, the letter says.

It must be stated that as per the current results on evaluation matrix’s scale, the bid by Suraksha Consortium will be put to vote first; however the tenor of the clarifications sought by lenders in the CoC, makes it apparent that the bid by Suraksha remains silent on certain key issues (such as provisioning of tax dues of JIL), which have led certain bids to fail in the past, the letter said.

Homebuyers have also called upon their authorised representative to negotiate with NBCC so that its revised bid can be voted upon at the first instance and not at the second instance.

Homebuyers “unequivocally wish that NBCC should take over the JIL. The homebuyers are not comfortable with Suraksha being the successful resolution applicant (considering that the government had apprised the Supreme Court that it will provide concessions to NBCC only, for the exorbitant tax liability of JIL, and, further considering that Suraksha prima facie lacks the financial competence to honour the liabilities of JIL),” the letter says.

Forensic audit into the affairs of JIL since its inception

They have also asked their authorised representative to re-agitate the requirement of forensic audit into the affairs of JIL, since its inception, as priority and ensure that after the takeover of the firm “homebuyers should not be levied with any escalation in their costs and illegal charges such as increased super area and/or parking areas.”

Claim for delay compensation 

They have also said that their claim of compensation for delay be treated at just and fair equitable rate, in the bids, submitted by the two prospective resolution applicants i.e. Suraksha and NBCC.

“The bids should make analogous provisions, to designate approximately 500-600 acres of surplus land as a swap against home buyers’ rightful and legal claim of delay compensation. Furthermore, any contingent assets (being the fate of Rs 750 crores lying with NCLT, Allahabad Bench and fraudulent mortgages on 858 acres of land) should be further earmarked to pay the delay compensation to the home buyers,” the letter says.

Homebuyers have also asked their representative to make sure that NBCC’s bid is compliant with the provisions of RERA.

“While the bid from Suraksha states that in case of delay in completion of the flats at its end, would lead to homebuyers’ entitlement of compensation for delay under the provisions of RERA; the same remains absent in the case of NBCC. You are hereby called upon to insist on NBCC, to make its bid, compliant with the provisions of RERA. In case of any delay at the end of NBCC in completion and handing over of the units; it should pay a delay compensation under the then prevalent, relevant RERA regulations,” the letter said.

Voting only on government-owned portals

The Associations have also instructed their authorized representative to make sure that no private service provider’s portal is used for voting by the homebuyers. There should be uniform portal for voting by the lenders and the home buyers, and it should be on the government owned portals such as CDSL or NDSL.

As per the tentative timelines decided by the lenders during their last meeting on November 18, bidders are likely to submit their final plans by December 3. Another round of meetings for lenders may be held on December 6 wherein the two bidders may be called upon to make their final presentations, sources said.

The approved plan may be submitted before the National Company Law Tribunal (NCLT) by December 19. December 21 is the last date for completing the resolution process.

Nearly 13 banks and over 23,000 homebuyers have voting rights in the CoC. Buyers have nearly 60 percent of votes. For the bid to be approved, 66 percent voters should be in favour of the deal.

On November 6, the Supreme Court had directed that Jaypee Infratech's insolvency process should be completed within 90 days and asked the resolution professional to invite revised bids from the NBCC and Suraksha Realty.

Jaypee Infratech Interim Resolution Professional Anuj Jain had asked Suraksha Realty and NBCC to submit their revised offers.

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First Published on Nov 22, 2019 06:51 pm
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