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NBCC seeks one-month extension from SC to submit revised resolution plan for Jaypee Infra

In its application submitted before the Supreme Court, it says that there has been ‘significant commercial impact’ on the operations of the corporate debtor on account of the COVID-19 pandemic and that a ‘cash flow’ imbalance may arise due to non-availability of Rs 750 crore.

The government’s construction arm NBCC has asked for four more weeks to submit a modified resolution plan to the National Company Law Tribunal (NCLT) for the construction of 20,000 stuck units by embattled firm Jaypee Infratech stating that there has been a ‘significant commercial impact’ on the operations of the corporate debtor on account of the COVID-19 pandemic and that fresh approvals would be required from the government.

“It is also pertinent to highlight that the impact of the COVID-19 has also induced an effect on real estate and land sales in the open market which also requires additional time for cost analysis, including viability aspects on entire resolution plan,” the application submitted by NBCC before the Supreme Court on April 3 said.

“…since the time the Applicant had submitted the Earlier Resolution Plan, there has been a significant commercial impact on the operations and functions of the Corporate Debtor as well in view of the onset of COVID-19 pandemic and the resultant lockdown. The Earlier Resolution Plan was submitted after a detailed technical analysis including engineering aspects which include cost to complete estimations of Corporate Debtor between Sep-Oct, 2019 i.e. approx 18 months prior to the date of the SC Judgment,” it said.

This analysis would have to be revisited by the Applicant on account of lapse of time and other change in circumstances, including cost escalations, changes in balance cost of construction and material changes occurred after approval of plan by CoC, it said.

The application also said that it may not submit a fresh resolution plan at the end of four weeks if it finds the circumstances “unviable”.

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“It is submitted that the Applicant is requesting for an extension of further 4 weeks’ time to assess the viability and feasibility of submitting a fresh/modified resolution plan for JIL. In case, submitting a plan in the circumstances stated above is found to be unviable, the Applicant reserves its rights to not submit any further plans,” the document said.

“…the Applicant would have to evaluate the fair value and selling capability of 758 acres of lands made available to Corporate Debtor pursuant to this Hon’ble Court’s Judgement dated 26 February 2020. These aspects would have substantial impact on the modified/New Resolution Plan,” it said.

In its application submitted before the Supreme Court on April 3, it also said that a ‘cash flow imbalance’ may arise on account of the non-availability of Rs 750 crore.

“In view of the SC Judgment, the stipulations under the Earlier Resolution Plan with respect to utilisation of Rs 750 Crore have been rendered ineffective. Due to the non-availability of this Rs 750 Crore, there is likely to be a cash flow imbalance for the Corporate Debtor which requires to be evaluated based on the other available resources/assets,” it said.

In a judgment delivered on March 24, the apex court said the Insolvency Resolution Professional (IRP) can invite modified or fresh resolution plans only from Suraksha Realty and state-run NBCC, the two applicants who were allowed to do so in the judgment on November 6, 2019. It said the resolution plans should be submitted in two weeks.

The apex court had also said that Rs 750 crore deposited by Jaypee Associates would not go to Jaypee Infratech and that NBCC would not be allowed to utilise it for construction.

In December 2019, a CoC comprising 13 banks and around 21,000 homebuyers approved NBCC's resolution plan with 97.36 percent votes in favour. The proposal was approved by the lenders in the third round of bidding process to find a buyer for Jaypee Infratech.

In its bid, the NBCC had proposed to complete over 20,000 pending flats in housing projects launched by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh). Homebuyers' claim amounting to Rs 13,364 crore and lenders' claim worth Rs 9,783 crore were admitted.

In November 2019, the top court had directed completion of Jaypee Infratech's insolvency process within 90 days and the revised resolution plan to be invited only from the NBCC and Suraksha Realty.
Vandana Ramnani
first published: Apr 5, 2021 05:48 pm

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