The National Company Law Tribunal has asked debt ridden Jaiprakash Associates Ltd to return nearly 760 acre land to its subsidiary Jaypee Infratech, declaring the transfer of the land as "fraudulent" and "undervalued".
In an order, the Allahabad bench of NCLT has directed JP group's flagship firm Jaiprakash Associates Ltd (JAL) to release and discharge interest created over the patch of land to lenders including ICICI Bank.
The order came over a petition filed by Jaypee Infratech's resolution professional (RP) Anuj Jain in the NCLT seeking direction over the transactions entered by the company's promoters, creating mortgage on its 858 acre to secure debt for JAL.
"The impugned transactions... are declared as fraudulent, preferential and undervalued transactions," said the two member bench comprising Saroj Rajware and VP Singh.
"We pass the order for release and discharge of the security interest created by the Corporate debtor (Jaypee Infratech) in favour of lenders of the Jaiprakash Associates," the bench added.
However, the NCLT directed to return only 759 acre out of total 858 acre as it found that the transaction related to 100 acre in Aligarh district was entered before the start period of corporate insolvency resolution process (CIRP).
According to sources, this order will increase the total asset value of Jaypee Infratech as the 759 acre of land would be worth around Rs 1,500 to Rs 2,000 crore at the current market value.
"...it is clear that the mortgage of land of JIL (Jaypee Infratech) in favour of lenders of JAL, amounts to transfer of interest in property of JIL for the benefit of its creditors i.e. JAL and putting it in a beneficial position vis-a-vis other creditors in a preferential transaction," the NCLT observed in its order.
Meanwhile, the Supreme Court had on May 16 directed JAL to deposit an additional Rs 1,000 crore with its Registry by June 15 to provide refunds to the hassled home buyers.
On submission of this amount, the liquidation proceedings against Jaypee Infratech, will remain stayed, the apex court had said.
Last year, NCLT had admitted the application by an IDBI Bank-led consortium, seeking resolution for Jaypee Infratech under the Insolvency and Bankruptcy Code.
The tribunal had appointed Jain as Interim Resolution Professional (IRP) to mange the company's business.
Consequently, Lakshadweep emerged as a front runner to acquire Jaypee Infratech with Rs 7,350 crore bid.
Earlier this month, lenders of Jaypee Infratech rejected the bid by Lakshadweep, the highest bidder for the company, as they found it inadequate.
Jaypee Infratech has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI. The comnpany is developing about 32,000 flats, of which it has delivered 9,500 apartments.
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