NCLAT refuses to stay voting by Jaypee Infratech creditors' panel
15 May 2019
The National Company Law Appellate Tribunal (NCLAT) n Tuesday refused to stay voting by Jaypee Infratech’s creditors on the revised offer of state-owned National Buildings Construction Company Ltd (NBCC Ltd) to acquire the debt-laden realty firm through insolvency proceedings.
Soon after a Committee of Creditors (CoC) decided to put for vote NBCC's bid, banks led by ICICI Bank sought a stay on the voting process. The NCLAT, however, rejected the demand.
ICICI Bank and others approached NCLAT with the plea that as they were not a part of the CoC and thus had no voting rights and that they should be heard before the lenders decided on the NBCC offer.
Refusing to entertain the plea by banks, a two-member NCLAT bench headed by chairman Justice S J Mukhopadhaya also warned banks that they would get "zero rupees" if the process is stalled.
Justice Mukhopadhaya said the interest of thousands of home-buyers was of prime importance and the matter needed to be resolved even if there is just one bidder.
The final decision of JIL’s lenders will, however, be subject to the outcome of an appeal filed by ICICI Bank and other lenders.
Last May, the Allahabad bench of NCLT ordered Jaiprakash Associates Limited (JAL) to return 858 acres of land to JIL. The parent firm JAL had mortgaged this land pool with lenders such as State Bank of India, ICICI Bank, IDBI Bank, and Standard Chartered Bank to obtain loans. The land was transferred by JAL to itself after the lenders started classifying the accounts of its subsidiary JIL as non-performing asset. The banks had approached the NCLAT against the NCLT order and the case is still sub judice.
The banks made the plea before the bench which was to take up the matter of an appeal against an NCLT order that directed Jaiprakash Associates Ltd (JAL) to return nearly 760-acre land to its subsidiary Jaypee Infratech.
Jaypee Infratech's interim resolution professional (IRP) Anuj Jain had filed a petition in the National Company Law Tribunal (NCLT) seeking direction over transactions entered by the company's promoters, creating the mortgage on its 858 acres to secure debt for JAL.