NCLAT annuls creditors' voting on NBCC's bid for Jaypee Infratech

Appellate tribunal says Jaypee committee of creditors can renegotiate with NBCC if need be. Voting to resume on May 31.

The National Company Law Appellate Tribunal (NCLAT) on Friday annulled voting by the committee of creditors (CoC) of Jaypee Infratech Limited on a bid submitted by NBCC (India) Limited for the debt-laden real estate company.

A three-member bench led by Chairperson Justice S J Mukhopadhaya gave the Jaypee CoC time till May 30 to renegotiate the terms with NBCC if required. Fresh voting on NBCC's bid will resume May 31.

“In case the Committee of Creditors are not inclined to accept the plan they will not pass any order of rejection without prior permission of this Appellate Tribunal,” said NCLAT.

The appellate tribunal also allowed the homebuyers to take help from a legal professional who will be allowed to attend meetings of Jaypee lenders. The legal professional will, however, not be allowed to cast any vote nor express any opinion in the meetings.

Jaypee Infratech lenders had on Thursday started voting on whether to accept or reject NBCC India's bid for the company under corporate insolvency resolution process. Nearly 13 banks and as many as 23,000 homebuyers of Jaypee Infratech have voting rights in the lenders’ meet. The said voting was scheduled to end on Sunday and the CoC would have announced the results on May 20.

On May 14, NCLAT refused to stay voting by the CoC on a plea moved by ICICI Bank and others. ICICI Bank and others had on May 14 approached NCLAT with the plea that as they were not a part of the CoC and thus had no voting rights, they should be heard before the lenders decided on the NBCC offer. The orders on Friday annulling the voting process came on a plea moved by IDBI Bank.

Last week, Jaypee Infratech’s CoC had written to NBCC to drop conditions around its proposal if it wanted to win the bid. NBCC had, however, refused to dilute those conditions, according to reports. NBCC had demanded that income tax liabilities be extinguished and had also sought a dispensation from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer.

In its bid, NBCC has offered to settle the total operational debt aggregating to Rs 9,712 crore by paying Rs 20 crore. Operational debt comprises I-T department claims, additional compensation claims of Yamuna Expressway landowners, and claims of other operational creditors. It has promised to deliver flats to homebuyers in four years. It has also offered 1,400-acre land worth Rs 6,000 crore as well as Yamuna Expressway highway to lenders.