LM: The Jaypee jigsaw: Filling the final pieces

31 July 2019: It will be over someday soon, but, hopefully, not before it has taught a lesson to everyone involved—the government, the judiciary, homebuyers, and the promoters of Jaypee Infratech Ltd (JIL), an arm of the Manoj Gaur-run Jaiprakash Associates Ltd (JAL). It is a classic case of greed versus fear—an ambitious promoter unable to manage risks, and a government content with making rules without attempting to enforce them.

The playground was Jaypee’s 6,175 acres of land spread over five locations in Uttar Pradesh, namely Noida, Mirzapur, Jaganpur, Agra and Tappal, with most of it lying in Noida. The land came to JAL in 2007 as part of an Uttar Pradesh government contract to build a 165 kilometres long expressway between Noida and Agra. Things turned sour in 2012 when the real estate market imploded spectacularly, particularly in the boomtowns that ring fence the National Capital Region. Housing projects ground to a halt. Customer advances got stuck in companies on the verge of insolvency, such as Jaypee. Caught in the vortex are now some 20,000 buyers waiting for their dream home in one of the 12 projects that the Jaypee group planned to construct at its so-called “Wish Town” township.

For some, the wait is now well over five years, even as at least 50 cases do the rounds in the Supreme Court, the National Company Law Appellate Tribunal (NCLAT), the National Company Law Tribunal (NCLT), and various consumer courts. The latest Supreme Court judgment in the Amrapali matter— another case of homebuyers versus an errant builder—has rekindled hope among Jaypee customers of an early resolution.

The apex court last week cancelled the licence of Amrapali Group and asked NBCC (India) Ltd to take over all its ongoing, unfinished housing projects. “The Supreme Court has unequivocally put the homebuyers’ interest at the top of the ladder and we hope other stakeholders and quasi-judiciary bodies take a message from this ruling,” says Aaditya Gutgutia, a 38-year-old homebuyer who put money into a “Wish Town” apartment. “Homebuyers are looking at NBCC and banks with a lot of hope… that our agony will end soon.”

On Monday, the Supreme Court ordered NBCC to take over as a consultant and find a way to complete a slew of unfinished housing projects that belong to Unitech Group, whose promoters are currently in jail for defrauding homebuyers. For the thousands of homebuyers who sunk their hopes on barren patches of land in Noida, the wheels of the system finally seem to be creaking forward.

The Jaypee saga, in particular, will leave ripples across the real estate industry for years to come. It was perhaps the first insolvency case against a real estate developer in India. The slew of court battles that ensued have already resulted in two marquee changes: a homebuyer is on par with a bank or lender in an insolvency court, and there is now the new threat of a public sector entity, like NBCC, taking over incomplete housing projects.

“We are clearly past the wild west bonanza where builders operated on the basis of flimsy business models,” says Arun Maira, a member (urban affairs) at the erstwhile Planning Commission. The era of zero finance from the builder, where customers paid money upfront, is over, Maira says, and adds that significant changes in law and regulations are inevitable going forward since the Supreme Court has clearly set a precedent by siding with the weaker party, the consumer.

But even as those fairer terms of engagement, between homeowner and developer, await to be written, for those trapped in the middle, the immediate concern is: who will build the houses and when will it be built? One critical difference between the Amrapali case and Jaypee case is that there are still assets (like the Yamuna Expressway) lying with Jaypee, all of which can be monetized. That has resulted in homeowners and banks fighting pitched battles in the halls of bankruptcy tribunals. Banks would, after all, like to liquidate the assets and recover as much money as possible, while homebuyers would want someone to build them a home. In August, the Jaypee liquidation drama would cross 350 days since it began last year. And all eyes, unsurprisingly, are on the Supreme Court. “As the matter is already before the Supreme Court, it can take a very radical approach,” says Manoj Kumar, partner at legal and corporate advisory firm Corporate Professionals.

While it is one particular case involving a single developer, the outcome may have wide-ranging fallout in a country where an estimated 500,000 houses remain unfinished for well over six years in the top seven cities alone.

Boom and bust

J.S. Bedi, 43, who works a medical representative for a pharmaceutical company, had booked a ₹74-lakh four-bedroom house in 2011 at Kensington Boulevard, one of those 12 housing projects at Wish Town. It’s a daily struggle for Bedi, who lives in a rented house at Ashram Chowk in Delhi with his wife and two children. “I have already paid ₹67 lakh. My wife can’t go out to work as she has to look after her father. I earn little and pay most of it as EMIs,” he says.

It was the heydays of the first decade of this century, with all asset classes booming—equities, gold, commodities, and, of course, real estate. Gaur then, coming into his own after his father and founder of the Jaypee group had ceded day-to-day operations, was a businessman on overdrive. The group went into major expansion in power and cement capacities between 2005 and 2012. At one point, JAL was the third largest cement manufacturer in the country with an annual capacity of 33 million tonnes.

Rumoured to have close ties to the then Uttar Pradesh chief minister and Bahujan Samaj Party chief Mayawati, every tender that Gaur touched turned into gold. That fetched him the expressway order that would eventually prove to be his nemesis. JIL was JAL’s special purpose vehicle (SPV) that would develop, operate and maintain the expressway that arguably is one of the best pieces of infrastructure created in the country. A Formula 1 track on the expressway, besides a hospital, a school and a college came up alongside.

Over the next four to five years, the group would go on to announce as many as 27 real estate projects—split between JAL and JIL—comprising flats and villas of various sizes to cater to classes ranging from the middle-income groups to the super rich. The group would run full-page advertisements in leading newspapers, offering dream homes at five locations in Uttar Pradesh. Many non-residents, either returning to India or those remitting money, bought into the promise.

“We met a lot of people… friends, bankers who had and who did not have exposure to the group. And all advised us to book a house. We were looking for a spacious living in a greener, more secure area,” says 62-year-old Ajoy Shah.

And then came the collapse of the real estate sector, somewhere around 2012-13. The Noida region was the worst-hit. Banks curtailed lending and consumers withdrew. The industry went into a tailspin as the Narendra Modi government went after black money. To make matters worse, an adverse ruling in 2015 by the National Green Tribunal, banning all construction within a kilometre of the Okhla Bird Sanctuary, an area not far from Noida, further affected sentiment. The November 2016 demonetization sucked the remaining life out of the informal sector, a key component of the real estate boom.

As the banking sector stared at mounting bad debts, the government enacted the Insolvency and Bankruptcy Code, 2016 to help lenders explore all options to recover their money within a time frame. The law set a 270-day deadline to find a resolution. JIL found its name in a list of 12 companies the Reserve Bank of India (RBI) had prepared and sent to the banks in June 2017 to invoke bankruptcy proceedings. Gaur was caught napping while he had been trying to work out a deal with IDBI Bank, one of the lenders. But now, the only recourse was the NCLT, Allahabad, where the case would proceed.

It dealt a body blow to the likes of Ajoy Shah. Having booked his house in 2010, he paid his last equated monthly instalment (EMI) this year but awaits his dream house—a three-room flat in Kensington Boulevard. “There is no communication from the firm. We last got a letter from them in 2013 that the delivery would happen three years later. We are still waiting for the handover as we go around doing the rounds of the Supreme Court, the NCLT and the consumer courts,” he says.

Bankruptcy battle

Jaypee’s bankruptcy case was unique as it affected not just the banks, but also around 26,000 homebuyers, as per figures then. All other cases in the RBI’s early list were mostly industries or infrastructure companies. Hence, Jaypee quickly became a matter of public interest.

“It’s very painful,” says Ajai Kaul, a 55-year-old director of technology at a multinational corporation. “We were thrown out of our own home state, Kashmir, in the 1990s. Thirty years ago, I slept on the floor at various migrant shelters in Delhi. I made it on my own through sheer hard work. I paid ₹40 lakh upfront for my house and another ₹10 lakh for a shop there. I have two brothers who also booked houses there and each paid as much. None of us has got any flat. Banks seem to be in collusion with the builder.”

A forensic audit report by T.R. Chadha & Co. Llp for the period between 1 April 2014 to 31 March 2017 found banks ever-greening the group’s loans and imposing inexplicably high penalties for pre-payment, a strange occurrence given that JIL was in trouble and thousands still awaited the handover of homes.

“JAL and JIL were both ripped-off by banks. Banks have already recovered their principal amount. The litigation has been on for two years now and I believe the case should be settled outside the court,” says Krishan Mitroo, a 75-year-old homebuyer and a former air force pilot.

With nearly a decade of their life gone, even the homebuyers are now divided. Earlier, nine resident groups had been set up just to fight the court battles, but now, some are in favour of a settlement—as long as they get the promised apartment. With almost a 60% strength in the ongoing arbitration process, homebuyers have been pushing for a government entity to take over and end the uncertainty. The Noida Development Authority has also given early indication of setting up a “stress fund” to disburse seed money to kick-start stalled projects. While NBCC taking over Jaypee sites as well and using the stress fund to get things started is one option, there are already growing concerns about what these thousands of unfinished homes may do to the balance sheet of the publicly listed company.

Irrespective of how exactly the Jaypee saga drags towards a resolution, the case has changed the real estate industry’s outlook forever. “If we consider trends in residential real estate over the last two years, demand for ready-to-move-in properties spiked significantly across cities, primarily led by the end users,” says Anuj Puri, chairman of Anarock Property Consultants.

The Real Estate Regulatory Authority (Rera) is also helping the cause, bringing some trust back into the system. “Rera has created a sense of discipline and accountability in developers,” Puri says.

Way forward

But Rera, an entity formed after Jaypee was admitted as a bankruptcy case, offers no hope to the its stranded buyers. They continue to fight their battle at the NCLAT and the Supreme Court.

Awaiting the Supreme Court order, Jaypee cannot be liquidated, which is otherwise a certain outcome in all insolvency cases where no resolution is found. While a mail sent to the company remained unanswered, a top official at the company cited, like Mitroo, Gaur’s handing over of the flats in the interim as proof of his commitment. He was not willing to come on record as the matter is sub judice.

The third round of bidding is underway as this story is published, the first two having failed as the banks were unwilling to accept the low quotes offered by the bidders. Mitroo remains sceptical. “I wonder how a new buyer will come and complete the projects when Jaypee is best positioned to do it. After all, the new buyer will also want a return,” he says. Between Mitroo and the Shahs and the Kauls is the story of the Indian real estate buyer. Everything rests on hope but nobody knows who the enemy is. As Kaul says, “I don’t care who builds it. I want my house. I feel I am back to where I started 30 years ago.”

The LiveMint reported

NIE: NCLT approves NHPC’s bid for Lanco Teesta Hydro Power

30 July 2019: The National Company Law Tribunal’s (NCLT) Hyderabad bench has approved state-run hydropower major NHPC’s bid to acquire the insolvent Lanco Teesta Hydro Power Ltd (LTHPL) for an amount of Rs 897.50 crore, it was announced on Monday.

The original bid of Rs 907 crore was initially approved by the Committee of Creditors (CoC) of Lanco Teesta Hydro Power with 100 per cent vote and the present bid amount of Rs 897.50 crore, which takes into consideration the theft occurring at sitem, was approved by 97.34 per cent vote, an NHPC statement said.

“As per the approved resolution plan, NHPC would pay Rs 877.74 crore to the financial creditors and Rs 11.12 crore would go to the operational creditors of Lanco Teesta Hydro Power. NHPC will fund the project through a debt-equity ratio of 70:30,” it said.

The hydropower major said that the project would be implemented at an estimated cost of Rs 5,748.04 crore (at July 2018 price level), which includes a bid amount of Rs 907 crore for acquisition and estimated cost of balance work of Rs 3,863.95 crore, which includes interest during construction (IDC) and foreign component (FC) of Rs 977.09 crore. 

Earlier in March 2019, the Cabinet Committee on Economic Affairs (CCEA) had approved the proposal for NHPC to take over Lanco’s 500 MW Teesta Hydroelectric Power Project in Sikkim.

The Mew Indian Express reported

BQ: RBI Eases Norms On ‘End-Use’ Of Funds Raised Through External Borrowings

30 July 2019: The Reserve Bank of India, on Tuesday, eased guidelines around the end-use of funds raised through external commercial borrowings, giving corporations and non-bank lenders greater leeway in using overseas borrowings.

The easing of rules comes at a time when the domestic banking system remains cautious on lending, particularly to sectors which have thrown up a high proportion of bad loans. A section of non-bank lenders, too, are struggling to raise funds from banks and the bond markets.

To beat the funding constraints, the RBI has allowed ECBs to be used for working capital and general corporate purposes. It also allowed repayment of rupee loans using ECBs, including in cases where an account is stressed or has turned non-performing.

“Based on the feedback from stakeholders and with a view to further liberalise the ECB framework, it has been decided, in consultation with the Government of India, to relax the end-use restrictions,” the RBI said in a circular on Tuesday.

The move will enable Indian corporates to avail of offshore funds and ensure repayment of domestic lenders, Leena Chacko, partner at Cyril Amarchand Mangaldas, said, adding that the ECB regulations have been considerably liberalised. “Corporates can avail of ECBs for repayment of rupee loans which have been classified as NPA or SMA-2 for one-time settlement arrangement with the lenders,” Chacko said. “Lender banks are also permitted to assign SMA-2 and NPA loans to ECB lenders. NBFCs can also avail ECB and on-lend for general corporate purposes and working capital requirements subject to the conditions specified in the regulations.”

According to Moin Ladha, partner at Khaitan & Co., this will improve access to capital for Indian companies and in some situation be advantageous both from a borrower and lender perspective.

As per the new rules:

ECBs with a minimum maturity of 10 years can be used for working capital and general corporate purposes.

In the case of NBFCs, ECBs of minimum 10-year maturity can be used for on-lending.

ECBs of minimum maturity of seven years can be used to repay rupee loans for capital expenditure.

For repayment of rupee loans availed domestically for purposes other than capital expenditure and for on-lending by NBFCs for the same, the minimum average maturity period of the ECB is required to be 10 years.

Corporates can also avail ECBs for repayment of capital expenditure in manufacturing and infrastructure classified as SMA-2 or NPA under any one-time settlement with lenders. SMA-2 loans are those that are overdue by 60 days while loans overdue by more than 90 days are classified as NPAs.

Domestic banks can also sell loans to eligible ECB lenders, provided that provisions such as the ‘all-in-cost’ ceiling is not breached.

The Bloomberg Quint reported

MC: NCLAT agrees to hear pleas of IL&FS auditors against impleadment

30 July 2019: The National Company Law Appellate Tribunal (NCLAT) has said it would hear the pleas of auditors of IL&FS — Deloitte Haskins & Sells LLP and B S R Associates LLP — against an order passed by NCLT to implead them in the ongoing case of oppression and mismanagement of the scam-hit firm. The case will be heard on August 19.

A two-member bench of the NCLAT has directed the Ministry of Corporate Affairs (MCA) and others to file their replies in the matter within a week.

“Interim order dated 23rd July, 2019 passed by the National Company Law Tribunal, Mumbai Bench, Mumbai, in MA Nos. 2581 & 2071 of 2019 in CP 3638/241-242/2018 shall continue till next date,” the NCLAT said.

It further added, “However, the interim order will not come in the way of the National Company Law Tribunal and the Union of India to proceed in accordance with law.”

Earlier, the Mumbai bench of the National Company Law Tribunal (NCLT) had on July 18 allowed the MCA’s plea to prosecute Deloitte, BSR Associates and other auditors for their failure to detect and report the scams that took place at IL&FS under their watch as auditors.

Udayan Sen and Kalpesh Mehta, partners at Deloitte, and Sampath Ganesh, a partner at BSR & Associates, had also been impleaded as respondents by the NCLT order.

On July 23, the NCLT Mumbai bench had stayed its own order for four weeks to allow the auditors to appeal against the impleadment.

In its order, the NCLAT, while seeking the government’s response on the auditors’ plea against impleadment, said the NCLT Mumbai bench’s order of stay would continue till August 19, when it would hear the case.

As reported on moneycontrol

CNBCtv18: IRDA allows insurance companies to sign inter-creditor pact

30 July 2019: The Insurance Regulatory and Development Agency (IRDA) has written a letter to the Indian Banks Association (IBA), saying it has permitted insurance companies to sign inter-creditor agreement (ICA) pact along with banks for the resolution of stressed assets.

The Reserve Bank of India (RBI) in its June 7th circular had directed lenders to identify stress quickly, sign ICA and resolve bad loans proactively. Since many of the lenders are insurance companies, IRDA approval becomes crucial for all lenders to unite and hammer out resolutions.

The CNBCtv18 reported

ET: United Bank of India reports fraud against Visa Steel

30 July 2019: State-owned United Bank of India has reported fraud against Visa Steel for misappropriation of bank funds, while the lender has booked Rs 105 crore net profit for the quarter ending June.

UBI Managing Director Ashok Kumar Pradhan has said that the bank had Rs 90 crore exposure to Visa Steel, which defaulted a total of Rs 3600 crore of bank loans. The Kolkata-based lender has also reported fraud of Rs 850 crore against Bhushan Power & Steel Ltd (BPSL), following others including Punjab National Bank.

Senior UBI executives said that it has provided fully against the exposure to BPSL while the Visa Steel exposure is covered 60% by provision.

UBI’s net profit was backed by improvement in asset quality. This is the bank’s second quarterly net profit in a row after making seven consecutive losses earlier. It had made Rs 389 crore loss in the year ago period.

The bank’s net non performing assets ratio improved to 8.19% as on June, compared with 15.17% a year back.

UBI management has expressed confidence that its net NPA would be lower than 6% by September, a necessary parameter for lifting the lending restrictions and others under PCA framework.

“Irrespective of government infusion of capital, we should be out of PCA after the second quarter,” Pradhan told ET.

Reserve Bank of India had curbed business expansion possibilities of 11 banks including UBI for high ratio of sticky loans and negative return on assets. UBI’s gross NPA stood at 15.89% compared with 22.72% a year back while fresh accumulation of bad loans fell to Rs 407 crore compared with Rs 547 crore in the year ago period..

RBI, meanwhile, has allowed UBI to sell government securities bought before the business curb was imposed which boosted the bank’s earnings.

Its operating profit grew 141% at Rs 683 crore in the June quarter over Rs 283 crore in the year ago period. Net interest margin improved to 2.83% from 2.36%.

The Economic Times reported

BI: Jaypee Infratech resolution time extended by 90 days, NCLAT invites new bids

30 July 2019: New Delhi, The National Company Law Appellate Tribunal (NCLAT) on Tuesday extended the resolution process of Jaypee Infratech (JIL) by 90 days, thereby allowing submission of fresh bids for the bankrupt realty company.

The extension would come into effect with the receipt of the appellate tribunal’s order.

The two-judge Bench, headed by NCLAT Chairman S.J. Mukhopadhaya, however, barred Jayprakash Associates (JAL), the parent company of JIL, from bidding.

The order said the process of bidding and approval of a resolution plan by the committee of creditors (CoC) should conclude in 45 days.

The 90-day extension comes amid the lenders’ request to exclude around 250 days, from September 17, 2018 to June 4, 2019, from the stipulated period for corporate insolvency resolution process, as during this period no bid could be voted upon in view of the confusion regarding the voting rights of the homebuyers.

Under the Insolvency and Bankruptcy Code (IBC), the resolution process of a company is mandated to be concluded within 270 days, failing which the company has to go for liquidation. The 270-day deadline for Jaypee Infratech ended on May 6.

As reported on BusinessInsider

ET: Subramanian Swamy’s letter sends Indiabulls Housing stock tumbling

29 July 2019: Share of Indiabulls Housing Finance slumped over 7 per cent in Monday’s trade after BJP Leader Subramanian Swamy sent a letter to PM Modi, accusing the group of Rs 1 lakh crore fraud. The company has denied any wrongdoing.

Indiabulls Housing acknowledged Swamy’s letter being circulating in the social media that alleged embezzlement from NHB. The company told stock exchanges that loans outstanding as on date from NHB to Indiabulls Housing was nil.

“Indiabulls Housing, in its history, has never taken any loan or refinancing facility from NHB,” the company insisted. The total loan book of Indiabulls Housing is nearly Rs 87,000 crore.

That said, the clarification could not stop the scrip from falling 7.47 per cent in early trade. The stock was trading at Rs 577.50 at 9.25 am.

In a tweet earlier on Monday, Swami said: “It is necessary now to pierce the corporate veil, behind which the India Bull is situated. All leads on the “Bull” point to Ali Bibi alias TDK, and her 40 chors. But govt should see that unsuspecting investors are not unduly harmed.”

As per the alledged letter, Swami accused Indiabulls Housng Finance and its associates, is heading for a financial collapse and bankruptcy, resulting in large curroption issues in the real estate, banking , stock markets and loss of more than Rs 1 lakh crore f publicing and of National Housing Finance.

Swami said Indiabulls Housing Finance is headed for a financial collapse and bankruptcy, resulting in large corruption issues in the real estate, banking , stock markets and loss of more than Rs 1 lakh crore of public and of National Housing Finance.

The letter alleged that Indiabulls created more than 100 shell firms and took loans from NHB. It then re-alloted or siphoned it off to many real estate firms in Maharashtra, Delhi, Gurgram, Banglore and Chennai in the range of Rs 30 crore to Rs 1,000 crore. The letter suggested that the company accepted these amounts back as investments from the friendly real estate firms.

The Economic Times reported

ET: Cannot reject insolvency plea over claims disputed after demand notice: NCLAT

28 July 2019: The National Company Law Appellate Tribunal (NCLAT) has asked the NCLT to decide over an insolvency plea filed against leading real estate firm Raheja Developers by one of its operational creditors.

Setting aside the earlier order passed by the National Company Law Tribunal (NCLT), the NCLAT said existence of any “disputed claim” cannot be a ground to reject an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) to initiate insolvency proceedings, if it is not raised before issuance of a demand notice.

A three-member Bench, headed by Chairman S J Mukhopadhaya, observed that “existence of dispute must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice”.

Allowing the appeal of Ahluwalia Contracts (India) Ltd, an operational creditor of Raheja Developers, NCLAT said no arbitration proceeding was initiated or pending before demand notice under Section 8(1) of IBC and has remitted the matter back to the NCLT for fresh hearing.

“We set aside the impugned judgment dated September 19, 2018, and remit the case to the Adjudicating Authority (NCLT) for admitting the application under Section 9 after notice to the ‘Corporate Debtor’ (Raheja) to enable the ‘Corporate Debtor’ to settle the matter prior to the admission,” said NCLAT in its order passed on Tuesday.

The Delhi bench of the NCLT had on September 19 dismissed an application filed by Ahluwalia Contracts (India) Ltd under Section 9 on grounds that the claim was disputed and arbitration proceedings has already been initiated over it.

Section 9 of IBC gives power to the operational creditors of a company to initiate corporate insolvency resolution process after default.

Before that, he has to send a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default under Section 8(1) of IBC.

This was challenged by Ahluwalia Contracts before the appellate tribunal NCLAT.

NCLT had observed that claims of Ahluwalia Contracts falls within the ambit of ‘disputed claim’ and arbitration in the matter has already been initiated.

However, Ahluwalia Contracts, which was represented by his counsel Shashank Garg contended that when the demand notice was issued by it under Section 8(1) of the IBC, no arbitration proceeding was initiated or pending and it was initiated after that.

Consenting to it, NCLAT said “existence of dispute must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice”.

It further observed that the arbitration proceeding was initiated by Raheja Developer on May 24, 2018, which is after about one month from the date of issuance of demand notice under Section 8(1) issued on April 28, 2018.

Ahluwalia Contracts had received work order for plumbing and civil work from Raheja Developers and had claimed dues of Rs 5.50 crore.

The Economic Times reported

ET: NCLAT grants three weeks’ time to Dighi Port promoters to settle claims with lenders

28 July 2019: The National Company Law Appellate Tribunal (NCLAT) has granted three weeks’ time to the promoters of debt-ridden Dighi Port Ltd to negotiate with the company’s financial creditors to settle their claims.

A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has allowed Dighi Port Director Vishal Vijay Kalantri and other promoters to negotiate with the Committee of Creditors (CoC) and operational creditors to bring the company out of insolvency proceedings.

“We allow the Appellant – Director Vishal Vijay Kalantri and other promoters of Dighi Port Ltd (Corporate Debtor) three weeks time to state as to whether the financial creditors have agreed to settle the claim,” the appellate tribunal said in its order passed on July 24.

It further said: “If such proposal is made, financial creditors and operational creditors, if any, may consider the same.”

The appellate tribunal has directed to list the matter for next hearing on August 21.

During the proceedings of the NCLAT, counsel representing the promoters had submitted that they “may reach one-time settlement with the financial creditors” of Dighi Port.

Dighi Port is being developed by Balaji Infra Projects in the Raigad district of Maharashtra for which — Adani Ports and Special Economic Zone Ltd (APSEZ) and Jawaharlal Nehru Port Trust (JNPT) had submitted their bids.

Earlier, the lenders had rejected the resolution plan filed by APSEZ and approved JNPT bid. However, later APSEZ moved to NCLAT by filing an appeal against it.

Earlier, on July 10, NCLAT had said that until its further orders, NCLT will not pass any order of liquidation.

Dighi Port is facing insolvency proceedings after the Mumbai bench of the National Company Law Tribunal (NCLT) allowed recovery plea by DBM Geotechnics and Constructions Pvt Ltd, one of its operational creditor for non-payment of construction of multi-purpose berth on March 25, 2018.

CoC has informed NCLAT that claims filed by the financial creditors of the company is more than Rs 3,000 crore.

The promoters also informed the appellate tribunal that the Resolution Professional of Dighi Port has not admitted any claims of DBM Geotechnics & Construction so far.

This was also accepted by the counsel appearing on behalf of DBM Geotechnics & Construction before NCLAT.

Resolution Professional has submitted before NCLAT that in view of the pendency of the appeal, order of liquidation has not been passed.

The Economic Times reported