Jaypee Infra insolvency: NCLAT permits fresh bids
But, unlike the past, it allowed the resolution process, which will complete two years on August 9, to be finished in 90 days. This will include a 45-day window for the resolution professional and lenders of the debt-ridden firm to invite fresh bids. The remaining 45 days have been given to the resolution professional and the committee of creditors to select a resolution applicant or a company that will take over the distressed firm.
Under the Insolvency and Bankruptcy Code, the resolution plan must be completed within 270 days. An amendment to the law now provides for the process, including judicial review, to conclude in 330 days.
In a 17-page order, Justices SJ Mukhopadhaya and Bansi Lal Bhat barred Jaiprakash Associates from participating in the resolution process to find a new buyer.
They observed that the earlier resolution plans, including the one submitted by NBCC, could not be considered. But it kept the doors open for the public sector builder to participate afresh.
"It will be open to NBCC to file afresh improved 'resolution' plan. It is informed that Adani Infra (I) Ltd also proposed to file a 'resolution plan' but we are not expressing any opinion with regard to the same. We have given opportunity to all the eligible persons to file 'expression of interest'/(improved) 'resolution plan', individually or jointly or in concert with any person," the order said.
Following the order, interim resolution professional Anuj Jain will convene a meeting of the committee of creditors, comprising lenders, homebuyers and fixed-deposit holders over the next few days. But the date is expected to be finalised only after the Supreme Court hears a petition related to Jaypee over the next couple of days.
The NCLAT's direction came in view of lenders rejecting the resolution plan of state-owned NBCC and Suraksha Realty in the second round of bidding. Lenders had requested that 250 days - from September 17, 2018 to June 4, 2019 - be excluded from the stipulated period for the insolvency resolution process, as this time was taken up by the National Company Law Tribunal (NCLT) to decide on the voting rights of homebuyers.
The order also said that the real estate business should be looked at "from a different angle" as it is "primarily for construction of building for allottees". Pointing to an earlier order, it noted that "projects are temporary in nature as the asset of the 'corporate debtor' (distressed company) ie infrastructure stands transferred after sale/allotment to the allottees. It was also observed that the phrase "haircut" as normally used by the learned counsel cannot apply to allottees "for getting their flats and shops".
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References
- ^ Jaypee Infratech (timesofindia.indiatimes.com)
- ^ homeowners (timesofindia.indiatimes.com)
- ^ Insolvency and Bankruptcy Code (timesofindia.indiatimes.com)
- ^ NBCC (timesofindia.indiatimes.com)
- ^ homebuyers (timesofindia.indiatimes.com)
- ^ National Company Law Tribunal (timesofindia.indiatimes.com)
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