Complete corporate insolvency resolution process of Jaypee Infra Ltd within 90 days: SC
In a jolt to the Jaypee Group, the Supreme Court on Wednesday directed completion of the corporate insolvency resolution process for Jaypee Infratech Ltd (JIL) within 90 days and said the revised resolution plans will be invited only from the NBCC and Suraksha Realty.
The apex court said the pendency of any other application before the NCLT or NCLAT, including any interim direction, shall be no impediment for the IRP to receive and process the revised resolution plans from the two bidders.
A bench of justices A M Khanwilkar and Dinesh Maheshwari said it was passing directions in an “exceptional situation” to do complete justice to homebuyers, the Jaypee Group and the banks concerned.
“We direct the Insolvency Resolution Process (IRP) to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plans only from Suraksha Realty and NBCC respectively, which were the final bidders and had submitted resolution plans on an earlier occasion, and place the revised plan(s) before the Committee of Creditors (CoC), if so required, after negotiations and submit report to adjudicating authority NCLT within such time.
“In the second phase of 45 days commencing from December 21, 2019, a margin is provided for removing any difficulty and to pass appropriate orders thereon by the adjudicating authority,” the bench said.
The apex court said it was necessary to revive the real estate company as more than 20,000 homebuyers had invested in the Jaypee Group, the project had been implemented in part, a substantial number of homebuyers were put in possession and the remaining work was in progress and in some cases, at an advanced stage of completion.
“In this backdrop, it would be in the interest of all concerned to accept a viable plan reflecting the recent legislative changes,” it said.
The bench said the pendency of any other application before the National Company Law Tribunal (NCLT) or National Company Law Appellate Tribunal (NCLAT), as the case may be, including any interim direction given therein, shall be no impediment for the IRP to receive and process the revised resolution plans from the above-named bidders and take it to its logical end as per the provisions of the Insolvency and Bankruptcy (I&B) Code, within the extended timeline prescribed in terms of this order.
“We direct that the IRP shall not entertain any expression of interest (improved) resolution plan individually or jointly or in concert with any other person, much less ineligible in terms of section 29A of the I&B Code.
“These directions are issued in an exceptional situation in the facts of the present case and shall not be treated as a precedent. This order may not be construed as having answered the questions of law raised in both the appeals, including as recognition of the power of the NCLT/NCLAT to issue direction or order not consistent with the statutory timelines and stipulations specified in the I&B Code and Regulations framed thereunder,” the bench, in its 24-page judgment, said.
The court passed the order on a plea by Jaypee Group against the NCLAT verdict, which had barred it from participating in the auction of its debt-ridden group firm, JIL.
On July 30, the NCLAT had allowed fresh bidding for the cash-strapped JIL, but barred its promoter Jaypee Group from participating in the auction.
The group had earlier said it had built and delivered around 6,000 dwelling units to homebuyers during the insolvency proceedings.
The bench was told that around 12,000 flats or dwelling units were delivered to the homebuyers and of the total number, around 6,000 were given during the tough times of facing the insolvency proceedings.
The National Buildings Construction Corporation Ltd (NBCC), in pursuance of an earlier order of the apex court, had submitted a revised plan in a sealed cover on the issue of taking over the stalled housing projects of JIL to ensure that the hassled homebuyers got their dream homes.
The court, however, had not opened the seal of the revised plan and said it would deal with it later.
On September 3, the apex court had sought to know from the NBCC whether it was willing to give a revised proposal to complete the stalled projects of the cash-strapped Jaypee Group, even as the Centre said it had to step in because “a mess has been created by the promoter”.
The top court had said if the NBCC, which saw two of its proposals getting rejected earlier by lenders of the defaulting Jaypee Group, was not willing to submit a revised plan, then it might look for other alternatives.
The cash-strapped company had further said it might not have any objection if the NBCC was allowed to give a revised proposal, but Jaypee Group should also be allowed to come up with a fresh proposal as it was wiling to pay all its dues to its lenders and finish all the stalled projects within a period of three years.
To enable the fresh bidding process, the NCLAT had extended the resolution period of JIL for 90 days, including a 45-day window for the resolution professional (RP) and lenders of the debt-ridden firm to invite fresh bids.
The NCLAT direction came in view of lenders rejecting the resolution plan of the NBCC and Suraksha Realty in the second round of bidding. JIL went into insolvency in August 2017 after the NCLT admitted an application filed by an IDBI Bank-led consortium.