Wednesday, February 8, 2023

Jaypee Infratech insolvency case: Apex Court sets 45-day deadline for proceedings

A bench of Justices A.M. Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna directed the interim resolution professional of Jaypee Infratech Ltd (JIL) to complete insolvency proceedings in 45 days.

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The Apex Court has directed the interim resolution professional of Jaypee Infratech Ltd (JIL) to complete insolvency proceedings in 45 days, for completion of 20,000 pending flats in Uttar Pradesh’s Noida and Greater Noida.

A bench of Justices A.M. Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna used the Supreme Court’s plenary powers under Article 142 of the Constitution to do “substantial and complete justice to the parties and in the interest of stakeholders of JIL”.

The Court in its  375-page judgment, said that “We are conscious of the requirements of the discipline of Insolvency and Bankruptcy Code (IBC) and would hasten to observe that the course which is being adopted is in the complex and peculiar features of this case but, this repeat exercise concerning the CIRP of JIL cannot be an unending process and needs to be taken to its logical conclusion.”

The Bench held that Rs 750 crore deposited by Jaypee group in the top court and later transferred to NCLT is the property of Jaiprakash Associates Ltd (JAL) and the stipulations in the resolution plan concerning its usage by JIL or the resolution applicant cannot be approved.

After receiving the resolution plan, the IRP will take steps to complete the voting process of Committee of Creditors (CoC) and the report submission to the adjudicating authority within the extended period of 45 days the Court ruled. It said the resolution plans should be submitted in two weeks.

“The Adjudicating Authority shall take final decision in terms of Section 31 of the Code (Insolvency and Bankruptcy Code) expeditiously upon submission of report by the IRP,” the bench said.

“The Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is well-defined and circumscribed by Sections 30(2) and 31 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by Committee of Creditors. If, within its limited jurisdiction, the Adjudicating Authority finds any shortcoming in the resolution plan vis-à-vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by the Code and exposited by this Court”, the Supreme Court ruled.

The Apex court, which passed its Judgement on a batch of appeals against the NCLAT’s last year order and fresh petitions, said: “It is made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum”.

NCLAT had asked National Buildings Construction Corporation Ltd(NBCC)  to implement its proposal to acquire debt-ridden JIL and complete over 20,000 pending flats, but said that its direction was subject to its final order.

In August 2017, JIL went into the insolvency process after the NCLT admitted the application by an IDBI Bank-led consortium.

On March 3 last year, NCLT approved NBCC’s bid to acquire JIL through the insolvency process and complete over 20,000 pending flats over the next three and half years. The order was, however, challenged in the appellate tribunal NCLAT and later in the Supreme Court.

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The tribunal had also ordered that Rs 750 crore deposited by Jaypee Infratech’s parent firm Jaiprakash Associates with the Supreme Court registry, would be part of the resolution plan.

On August 6, 2020, the court had transferred to itself the appeals pending before the National Company Law Appellate Tribunal (NCLAT) against the NBCC plan to acquire debt-ridden Jaypee Infratech and construct over 20,000 pending flats.

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