Jaypee Infratech Case: NCLAT Directs NBCC to Implement a ‘Conditional’ Resolution Plan

April 27, 2020.

By Sharvari Lohakare.

The National Company Law Appellate Tribunal (NCLAT) refused to stay the implementation of the modified resolution plan while hearing an urgent petition filed by the National Buildings Construction Corporation (NBCC) during the extended lockdown period. It directed the state run NBCC to acquire the debt ridden Jaypee Infratech and complete construction of over 20,000 pending flats. This direction though is subject to a final order.

Justice Bansi Lal Bhat , acting Chairperson NCLAT and Justice Anant Bijay Singh, member (judicial) also directed Jaypee Infratech’s Interim Resolution Professional (IRP) Anup Jain to constitute an interim monitoring committee comprising of representatives from NBCC and its three main lenders, namely IDBI Bank Ltd. , the leader lender of the consortium, IIFCL and LIC for the successful implementation of resolution plan.

The hon’ble bench held that till any further orders, the approved resolution plan may be implemented subject to outcome of this appeal. The interim resolution professional may constitute interim monitoring committee comprising of the successful resolution applicant i.e. the appellant and the three major institutional financial creditors, who were members of the committee of creditors.

NCLAT issued notices to ICICI Bank Ltd. , the dissenting creditor who is entitled to cash payment pursuant to the modification; IDBI Bank and IRP directing them to file their replies and rejoinders , if any.

NBCC had earlier filed an appeal against the order of NCLT challenging the modification to its bid for Jaypee Infratech. NCLT had approved NBCC’s offer on March 3 but had allowed the objections by the dissenting creditors ICICI Bank and Yamuna Expressway Industrial Development Authority and directed payment to unclaimed fixed deposit holders. NBCC contended that NCLT had exceeded its jurisdiction by making such modifications and by directing ICICI Bank to pay an amount equivalent to what it would have received in the event of liquidation along with interest in 12 instalments.

For the fact, NBCC provides civil engineering construction services, the firm operates through three segments viz Project Management Consultancy (PMC), Real Estate Development & Engineering and Procurement and Construction (EPC).

In December 2019, a committee of creditors comprising 13 banks and around 21,000 homebuyers had approved the resolution plan of NBCC with 97.63 per cent vote in favour. Jaypee Infratech went into insolvency process in 2017 after the NCLT admitted an application by an IDBI Bank led consortium. 

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