The insolvency resolution of Jaypee Infratech is back on the drawing board as the National Company Law Appellate Tribunal (NCLAT) on Tuesday asked representatives of all stakeholders to resume discussions on the bid submitted by NBCC (India).
The NCLAT has called for another round of discussion between banks, homebuyers, and fixed deposit holders on July 17 after it was told that the 13 banks, which are lenders to Jaypee, had rejected the NBCC plan, while some homebuyers had abstained from voting.
On Tuesday, the resolution professional of Jaypee informed the NCLAT that of the total votes polled on NBCC’s plan, nearly 34.75 per cent of homebuyers had voted in favour, while 1.44 per cent had voted against. As much as 23.8 per cent of the homebuyers had abstained from the voting process, the resolution professional told the NCLAT. The homebuyers comprise 59 per cent of the Committee of Creditors (CoC) of Jaypee.
The 13 banks comprising the other 40.75 per cent of the CoC had voted against the NBCC’s bid, the resolution professional said. Voting on NBCC’s bid for Jaypee had started on May 31 and ended on June 10.
On July 17, the NCLAT said it would hear the banks on issues they had against NBCC’s plan and whether they could modify it appropriately so that it could meet the needs of all the stakeholders. It has asked the banks to nominate one high-ranking officer from any one bank, who could represent all the 13 lenders. The banks will also have to produce a gist of the resolution plan submitted by NBCC and objections they have with regard to it on the next date, the appellate tribunal said.
During the hearing on Tuesday, a three-member bench led by Chairperson Justice S J Mukhopadhaya observed that only NBCC’s plan should be considered at this stage as it was “a government company and one could rely on it”. The observation came after the banks requested that the appellate tribunal should allow them to call for and consider other bids, including the one by Adani as it was offering more money and had promised to complete the pending projects of Jaypee in nine months.
The proposal,s however, ticked off by the NCLAT, which observed that the banks should not engage in “backdoor” negotiations with Adani group. If the group had a good proposal to finish the project, it should file an intervention application and appear before the appellate tribunal, the three-member Bench said. The Adani group, the NCLAT observed, does not have relevant experience in infrastructure and, hence, should not be considered at this stage.
Only if the NBCC plan failed to make any headway despite NCLAT’s intervention, other plans, including the one submitted by Adani, would be considered, the Bench said.
NBCC had asked to be exempted from income tax liability as well as from taking consent of authorities for transfer of businesses. It had also not agreed to change its proposal that lenders should take unsold flats in case NBCC fails to sell them.
Jaypee was taken to the National Company Law Tribunal (NCLT) by an IDBI Bank-led consortium for failing to repay debt worth nearly Rs 24,000 crore. In the first round of insolvency proceedings conducted last year, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. In October 2018, the RP of the company started a second round of bidding to revive Jaypee.