NCLAT admits Jaiprakash Associates' plea against NCLT order

The National Company Law Appellate Tribunal (NCLAT) today admitted the petition of debt ridden Jaiprakash Associates challenging NCLT order, which had directed the realty firm to return nearly 760-acre land to its subsidiary Jaypee Infratech.

It has directed to list Jaiprakash Associates' appeal on July 13 for next hearing, when the petition of lenders - Axis Bank, Standard Chartered Bank and ICICI Bank, which have already challenged the order of National Company Law Tribunal (NCLT) -- will be heard.

The appellate tribunal had already stayed the order of Allahabad bench of NCLT on May 24 on lender's plea.

"The interim order would continue," said a two member bench headed by Chairman Justice S J Mukhopadhaya while admitting the plea.

Passing an order on May 16 NCLT had asked Jaiprakash Associates to return nearly 760-acre land to its subsidiary Jaypee Infratech, declaring the transfer of the land as "fraudulent" and "undervalued".

However, NCLAT had on May 24 stayed it, saying the finding of NCLT that fraud has been committed on the mortgaged property by Jaiprakash Associates to the banks was not based on 'evidence' or 'in accordance with law'.

The appellate tribunal had also observed: "NCLT is not a civil court...it has no right to declare an instrument illegal".

NCLT had directed JP Group's flagship firm Jaiprakash Associates to release and discharge interest created over the patch of land to lenders, including ICICI Bank.

The order had come 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 Jaiprakash Associates.

In the 77-page order, the tribunal had listed out the details of six parcels of land totalling 759-acres land in Agra and Aligarh districts, Uttar Pradesh.

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 CIRP.