TOI: Jaypee buyers want to be in monitoring committee

7 June 2020: Despite a growing clamour for fast takeover the of debt-ridden Jaypee Infratech, state-run NBCC has said that it will wait for a clear direction from the National Company Law Appellate Tribunal (NCLAT) to start construction activity at the stalled Wish Town project.

Meanwhile, a homebuyers’ association has appealed to the NCLAT to be made a party in the interim monitoring committee that will look into the day-to-day affairs of the builder company.

“There has been a mismatch in the financial responsibility we have taken for the completion of Wish Town and what NCLT has actually awarded us. Unless the NCLAT settles it in our favour, we will not initiate any takeover bid,” VK Chaudhary, chief general manager of NBCC told TOI.

“Construction work at the Wish Town project is in progress and a monitoring committee is present, but NBCC will not get involved without a 100% clarity from the court,” he added.

Of 35,000 Wish Town flats, Jaypee Infratech claims that just 19,000 flats are left to be constructed.

Surprisingly, JIL completed 10,000 flats during the insolvency resolution period from 2017-2019. JIL’s day-to-day operation is now supervised by a monitoring company, which includes former interim resolution professional Anuj Jain and NBCC officials.

However, the Wishtown Welfare Society with a membership of 1,248 homebuyers has appealed to the NCLAT for its inclusion in the monitoring committee. “In our appeal, we have pointed out that the monitoring committee that will implement the resolution plan has no homebuyer representative,” said Raunak Jain, the legal counsel for the homebuyers.

Commenting on the absence of homebuyers from the monitoring committee, former interim resolution professional Anuj Jain said, “The investors in the project can only be part of the panel if the NCLAT gives its nod to the same.”

Source: The Times of India

BS: Govt orders probe against Jaiprakash Associates, Jaypee Infratech

27 May 2020: The Serious Fraud Investigation Office (SFIO) will probe Jaypee group’s flagship firm Jaiprakash Associates and bankruptcy-bound Jaypee Infratech for alleged financial irregularities, according to a source.

The probe agency comes under the corporate affairs ministry. The source said the ministry has ordered an SFIO probe against Jaiprakash Associates and Jaypee Infratech.

Jaypee group, which is into construction, cement, power, real estate, hotel and hospital businesses, has been facing crisis in the last few years due to defaults in debt repayments and huge delays in completion of housing projects in Noida and Greater Noida.

The group has already sold many cement and power plants to reduce its debt.

Jaypee Infratech, which is a subsidiary of Jaiprakash Associates, went into an insolvency process in August 2017. In December last year, the Committee of Creditors (CoC) comprising 13 banks and around 21,000 homebuyers approved the resolution plan of NBCC.

On November 6, 2019, the Supreme Court directed completion of Jaypee Infratech’s insolvency process within 90 days. In December, the CoC approved NBCC’s resolution plan.

Source: Business Standard

BS: Rs 750 cr paid by JAL was towards obligation of Jaypee Infratech: NCLT

6 March 2020: The NCLT Delhi bench on Tuesday approved the bid of state-owned NBCC to acquire debt-laden JIL through an insolvency process and complete around 20,000 pending flats over the next three and half years

The Rs 750-crore deposited by Jaypee Infratech’s (JIL) parent firm Jaiprakash Associates with the Supreme Court registry was a payment towards obligation of the debt-ridden firm and should be treated as the asset of the corporate debtor, the NCLT has observed while approving the bid of NBCC for JIL.

The NCLT Delhi bench on Tuesday approved the bid of state-owned NBCC to acquire debt-laden JIL through an insolvency process and complete around 20,000 pending flats over the next three and half years.

The court also ordered that the Rs 750 crore deposited by Jaypee Infratech’s parent firm Jaiprakash Associates Ltd (JAL) with the registry of the Supreme Court would be part of the resolution plan.

In the written order uploaded on its website on Thursday, the NCLT said that as JAL is not under further obligation to complete construction of homes, and it cannot be assumed that if this money returned then it would be utilised to settle the debt of creditors of Jaypee Infratech Ltd (JIL).

“Since JAL is not under further obligation to complete construction of homes, there is no occasion to assume that if this money go back to JAL, it would be utilised for the cause of the creditors of the corporate debtor, in view of thereof, we hereby dispose all CAs related to Rs 750 crore issue by holding that this money is to be treated as the asset of the corporate debtor,” the NCLT order said.

“Though it has not been explicitly explained that JAL paid on behalf of JIL, the matter pending before the Supreme Court being with regard to homebuyers of JIL, when money was asked to be deposited towards refund of JIL homebuyers and the same being paid by JAL, now it is not open to JAL to say that it is JAL’s money,” it said.

NCLT also rejected the submissions that Rs 750 crore has not gone into the books of JIL, therefore it cannot be treated as the assets of JIL.

“Since JAL has without any objection or condition paid to the home buyers of JIL on behalf of JIL, it has to be treated that the payments is towards the obligation of JIL,” said NCLT in its 115-page-long order.

According to NCLT, In this case, the homebuyer’s money has been lying with the corporate debtor and JAL, it is the admitted fact that money come from the homebuyers has gone to JAL in the name of construction.

“It is not the case of the JAL that JIL money has not come for construction. Moreover JAL, by the time it has desposited, was aware that it was depoisting that money towards the obligation owned to JIL homebuyers,” the order saod.

“Here there could not be any assumption or presumption to say that JAL depoisted this money before the Supreme Court with an assumption that it would come back to it in the event this money has not been utilised for the distribution of it to the homebuyers of JIL,” it said.

“As long as the Supreme Court has not stated that this money has to be returned to JAL, it has to be construed that Supreme Court has conciously retained the money within the custody of it and thereafter transferred this money to NCLT with a direction that the parties shall abide by the directions of NCLT,” said NCLT adding ” Had the Supreme Court has felt that it should go back to JAL, the Supreme Court would have returned it to JAL, but but has not been done.”

NCLT further said: “Whenever any payment is made towards any liability, it has to be treated as a payment made towards that liability. It does not matter who paid the money, it matters as whether it has been paid towards an obligation or not.”

Jaypee Infratech went into insolvency process in August 2017 after the NCLT admitted an application by an IDBI Bank-led consortium.

NBCC’s proposal was approved by the lenders in the third round of bidding process to find a buyer for Jaypee Infratech.

In its bid, NBCC had proposed to complete over 20,000 pending flats in housing projects launched by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh).

Homebuyers’ claim amounting to Rs 13,364 crore and lenders’ claim worth Rs 9,783 crore were admitted.

NBCC offered 1,526 acres of land to lenders under a land-debt swap deal.

Source : Business Standard

FE: Supreme Court seeks response from Jaiprakash Associates lenders on 858-acre land bank

20 September 2019: The Supreme Court on Thursday sought response from the lenders of Jaiprakash Associates (JAL) as to why they should not be asked to return a land bank of 858 acre to Jaypee Infratech (JIL), which is undergoing insolvency proceedings. JAL, the parent company of JIL, had mortgaged the latter’s land bank to secure loan of Rs 20,510 crore from a consortium of around 20 banks including State Bank of India, Axis Bank, ICICI Bank and Standard Chartered Bank.

A bench led by Justice AM Khanwilkar issued notice to JAL’s lenders on an appeal by homebuyers challenging the National Company Law Appellate Tribunal’s August 1 order that allowed JAL lenders to control over 858 acres of JIL land. The next hearing of the case will be on October 17.

Stating that the NCLAT had “erroneously legitimised certain transactions which they apprehend were “preferential,” Jaypee Green Krescent homebuyers said that the appellate tribunal overlooked the fact that the transactions were entered into by the corporate debtor in its run-up towards insolvency, where the management of JIL was aware of the impending insolvency event as its accounts were already declared NPA.

They further alleged that the preference was given to creditors of JAL and they got a “favoured treatment.” “… there was no viable explanation for entering the impugned transactions for the benefit of JAL, when the corporate debtor itself was facing acute financial crunch,” the petition stated.

It said that Section 43 of the code provides for the avoidance of preferences given by a corporate debtor and also invalidates any transfer of property or creation of an interest thereof by it during the look-back period to a person on account of antecedent debt or other liabilities which have the effect of putting such creditor, surety or guarantor in a better position in the liquidation waterfall than the position which it would have been in if such transfer had not been made.

According to the petition, the resolution professional under Section 25(2)(j) of IBC is duty-bound to examine all the transactions undertaken by the corporate debtor during the period of two years preceding the insolvency commencement date and file an application for avoidance of transactions.

“The management of the corporate debtors, related parties and their creditors often have the benefit of superior information of the financial affairs and may collude to siphon off assets with the knowledge that the corporate debtor may become insolvent in the near future,” the homebuyers stated. However, the JAL lenders told the apex court that the transactions were made in the ordinary course of business and there was nothing to show that they were made to defraud the JIL creditors.

NCLAT had set aside a National Company Law Tribunal Allahabad bench’s May 16, 2018 order, which had directed JAL to return the land to JIL and discharge the interest created over the patch of land to lenders. The tribunal had quashed the deal and termed the transaction as “fraudulent” and “undervalued.”

The NCLAT had on July 30 extended the CIRP period of JIL for 90 days during which fresh bids for the company can be submitted. Though fresh bids can be submitted by NBCC, Adani Infrastructure and Development, among others, the NCLAT had held JAL eligible to place new bids. Appeals against this NCLAT judgment are pending before the Supreme Court.

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 had started second round of bidding. On the suggestions of the SC, NBCC is supposed to file its revised plan to complete the pending projects. The Adani group is also now in the fray with its unsolicited bid.

The IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around Rs 24,000 crore. The NCLT had admitted the IDBI Bank-led consortium’ plea.

The Financial Express reported

FE: Jaypee Infratech case: NBCC to submit revised plan to take over 27 incomplete projects

6 September 2019: In a major relief to thousands of homebuyers of Jaypee Infratech (JIL), state-run housing firm NBCC on Thursday agreed to submit a revised plan for takeover of the bankrupt real estate firm’s 27 incomplete projects. A Supreme Court Bench, led by Justice AM Khanwilkar, directed NBCC to submit its proposal in a sealed envelope in three weeks. It also asked parties to continue the “interim arrangement”.

The Bench also asked NBCC to consider suggestions of all the stakeholders while drafting the plan.

The apex court on Tuesday sought NBCC’s response within two days on whether it wants to submit a revised plan for completing JIL’s unfinished projects. The direction came after additional solicitor general Madhvi Divan had suggested the court to seek response from the state-owned firm on submission of a fresh bid for taking over the stalled projects before passing any order.

Divan also told the apex court that the government will extend all necessary cooperation, including tax concessions to JIL, if NBCC was to take over the company. NBCC’s earlier plan was rejected by lenders on the ground that it was a conditional offer.

Jaiprakash Associates, the parent company of JIL, and its promoter had reiterated that they are the only ones who can complete and deliver all the 27 projects in three years and also pay off banks’ debt with “no haircut”. On August 2, the Supreme Court had in effect restrained the CoC of JIL from inviting fresh bids for two weeks and had asked parties to maintain a status quo.

The top court was hearing cross appeals filed by homebuyers of the bankrupt real estate firm and JAL and its promoters challenging the July order of the NCLAT that had allowed fresh bidding for JIL and also barred promoters from participating in the fresh auction.

JAL and Manoj Gaur, CMD of the suspended management of JIL, had challenged the NCLAT’s order that allowed fresh bidding for the firm and also barred promoters from participating in the fresh auction.

The Wish Town Home Buyers Welfare Society, which claims to have over 1,100 homebuyers of various JIL projects, had suggested that the apex court should “do complete justice” by inviting the bids in the court itself so as to get rid of the complex and cumbersome process of rounds and rounds of litigation and proceedings before the CoC, NCLT, and NCLAT.

IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around `24,000 crore. The NCLT, Ahallabad, had admitted the plea. 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 had started second round of bidding. While state-owned NBCC’s plan to complete the pending projects was rejected by the lenders, the Adani group is also now in the fray with its unsolicited bid.

The Financial Express reported

FE: Jaypee Infratech case: NBCC offers in SC to prepare revised plan for taking over stalled projects

5 September 2019: State-owned NBCC told the Supreme Court Thursday that it was willing to give a revised proposal to complete the stalled projects of debt-laden Jaypee Group to address the grievances of thousands of harassed homebuyers. The top court directed all stakeholders including homebuyers to make representation to NBCC within one week so that their concerns are taken note of in the revised plan.

A bench of Justices A M Khanwilkar and Dinesh Maheshwari gave three weeks to National Buildings Construction Corporation Limited (NBCC) to submit the plan before it in a sealed cover and deferred the hearing on the matter for four weeks.

“The NBCC (India) Limited after finalization of the revised plan may have to place it before the appropriate authority for its due consideration. That may require at least three weeks time. We accede to this request. The salient features of the proposed revised plan so finalized be produced in a sealed cover to the Court for its perusal on the next date of hearing,” the bench said and listed the matter on October 17.

The top court said that preparing of a revised plan by NBCC would not prejudice the rights and contentions of the parties and ordered status quo to continue on the insolvency proceedings. Additional Solicitor General Madhavi Divan, appearing for the Centre said that the finance ministry will also assist NBCC in drafting the plan.

On September 3, the apex court had sought to know from NBCC whether it was willing to give a revised proposal to complete the stalled projects of cash-strapped Jaypee group even as the Centre said it has to step in because “a mess has been created by the promoter”.

The top court had said if NBCC, which saw two of its proposals rejected earlier by lenders of the defaulting Jaypee group, is not willing to submit a revised plan, then it may look for other alternatives. Divan had said that the government held three meetings with various stakeholders and a decision has been taken that it was willing to give tax concession running into hundreds of crores to Jaypee group and enhanced compensation to farmers only if the NBCC is brought into picture and allowed to complete the stalled projects. She had said that court should ask NBCC to submit a revised proposal within three weeks as the Centre does not want any third party to be involved in this case.

Jaypee group on other hand had contended that the new amendments would not apply in this case and till now NBCC has submitted two proposals but it was voted out by the lenders. The cash strapped company had further said that it may not have any objection if the NBCC is allowed to give a revised proposal, but Jaypee Group should also be allowed to give a fresh proposal as it is wiling to pay all its dues to lenders and finish all the stalled projects within a period of three years.

On August 22, the top court had ordered status quo for a week on the insolvency proceeding after Jaypee Group challenged the July 30 order of the National Company Law Appellate Tribunal (NCLAT), which allowed the fresh bidding for the cash-strapped Jaypee Infratech.

On July 30, the NCLAT had allowed fresh bidding for the cash-strapped Jaypee Infratech but barred its promoter Jaypee Group from participating in the auction. To enable the fresh bidding process, the NCLAT extended the resolution period of Jaypee Infratech for another 90 days, which includes a 45-day window for the resolution professional (RP) and lenders of the debt-ridden firm to invite fresh bids.

The NCLAT direction came in view of lenders rejecting the resolution plan of state-owned NBCC and Suraksha Realty in the second round of bidding. Jaypee Infratech went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted an application filed by an IDBI Bank-led consortium.

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. The NCLAT had asked state-owned NBCC, whose bid was rejected by the CoC of Jaypee Infratech, to submit fresh resolution plan for the debt-ridden company.

The Financial Express reported

FE: Jaypee Infratech homebuyers to move Supreme Court against NCLAT order

27 August 2019: Homebuyers of embattled Jaypee Infratech (JIL) on Monday moved the Supreme Court, challenging the July order of the NCLAT that allowed fresh bidding for the debt-laden real estate firm and also barred promoters from participating in the fresh auction.

A bench led by Justice AM Khanwilkar tagged the matter along with similar other appeals pending before it. The batch of cases is likely to come up for hearing on August 29.

Jaiprakash Associates (JAL), the parent company of JIL, and Manoj Gaur, the CMD of the suspended management of JIL, had also challenged the NCLAT’s order that allowed fresh bidding for the embattled firm and also barred promoters from participating in the fresh auction.

Earlier on August 2, the SC had in effect restrained the CoC of JIL from inviting fresh bids for two weeks and had asked parties to maintain status quo after the government counsel apprised the Bench that the proposed amendments to the Code were being notified soon.

Wish Town Home Buyers Welfare Society, which claims to have over 1,100 homebuyers of various JIL projects, in its appeal, stated that the appellate tribunal without even considering all the proposals and comparing the best proposal in the interest of homebuyers had “erroneously” extended the Corporate Insolvency Resolution Period (CIRP) of JIL for another 90 days so as to invite fresh bids for the debt-laden firm. This order, according to the association, amounted to “usurping the powers of the NCLT, CoC and RP, especially when the statutory period for completion of CIRP as stipulated under IBC had expired” in May.

It suggested that the apex court should “do complete justice” by inviting the bids in the court itself so as to get rid of the complex and cumbersome process of rounds and rounds of litigations and proceedings before CoC, NCLT, and NCLAT.

The homebuyers body said that JAL had submitted its proposal to CoC under Section 12A of the IBC for consideration and withdrawal of CIRP. It said that though the proposal given by JAL was completely in favour of all the financial creditors which included homebuyers, it was not considered. JAL had stated that JIL had more assets then liabilities and the interest of homebuyers would be fully protected and the parent company would complete around 19,000 flats within four years and give possession of flats to all the homebuyers, the association said in its appeal .

“The darker clouds continue to cast gloom over the homebuyers and their frustration knows no bounds as even after 7 years of delay, the apartments – which were booked by them in 2009 – are nowhere near completion,” the petition said.

The Financial Express

NIE: Supreme Court extends status quo by a week on Jaypee’s insolvency resolution process

22 August 2019: The Supreme Court Thursday extended by a week the status quo on the insolvency process on Jaypee Group’s plea challenging the NCLAT order allowing fresh bidding for debt-laden Jaypee Infratech.

A bench of Justices A M Khanwilkar and Dinesh Maheshwari was told by senior advocate Fali S Nariman, appearing for Jaypee Group, that a batch of 18-19 petitions has been filed challenging the new amendments to the Insolvency and Bankruptcy Code (IBC).

The pleas have been listed for September before another bench of the top court, Nariman said.

The bench then enquired about Additional Solicitor General Madhavi Divan, who is assisting the court on behalf of Centre in the case.

A counsel informed the bench that she was arguing a part-heard case in another court, after which the top court posted the matter for further hearing on August 29.

“List after one week. Interim orders to continue till further orders,” the bench said.

On August 2, the Supreme Court had ordered status quo for two weeks on the insolvency proceeding after Jaypee Group challenged the July 30 order of National Company Law Appellate Tribunal (NCLAT), which allowed the fresh bidding for the cash-strapped Jaypee Infratech.

The top court had said that the new resolution plan has to be in accordance with the new amendments in the IBC.

Earlier, Divan had told the bench that Parliament has passed the amendments in Insolvency and Bankruptcy Code (IBC), which would address various concerns of homebuyers.

She had said that a meeting of various stakeholders with the Finance Ministry was scheduled to be held in the first week of August to resolve taxation and other related issues.

On July 30, the NCLAT had allowed fresh bidding for the cash-strapped Jaypee Infratech but barred its promoter Jaypee Group from participating in the auction.

To enable the fresh bidding process, the NCLAT extended the resolution period of Jaypee Infratech for another 90 days, which includes a 45-day window for the resolution professional (RP) and lenders of the debt-ridden firm to invite fresh bids.

The NCLAT direction came in view of lenders rejecting the resolution plan of state-owned NBCC and Suraksha Realty in the second round of bidding.

Jaypee Infratech went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted an application filed by an IDBI Bank-led consortium.

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.

The NCLAT had asked state-owned NBCC, whose bid was rejected by the CoC of Jaypee Infratech, to submit fresh resolution plan for the debt-ridden company.

The appellate tribunal has also rejected the plea of Jaiprakash Associates Ltd, the promoters of Jaypee Infratech, to be eligible to submit a bid.

On June 18, the Centre had informed the apex court that fresh amendments to the IBC give appropriate weightage to homebuyers to protect their interest.

The Lok Sabha on earlier passed amendments to the Insolvency and Bankruptcy Code, with the government asserting that the spirit behind the law is not to allow companies to die.

Rajya Sabha has already passed the bill and with its passage in the lower house, the Insolvency and Bankruptcy Code is set to be amended.

The top court had earlier said it may use its plenary power under Article 142 of the Constitution to protect the interest of over 21,000 homebuyers in the JIL case if their grievances are not addressed.

The court is hearing a plea which has sought that JIL is not sent into liquidation, although the deadline for the corporate insolvency resolution process is over, as it would cause “irreparable loss” to thousands of homebuyers.

On August 9 last year, the apex court ordered re-commencement of the resolution process against JIL and barred the firm, its holding company and promoters from participating in the fresh bidding process.

It allowed the Reserve Bank of India to direct banks to initiate corporate insolvency resolution proceedings (CIRP) against Jaiprakash Associates Ltd (JAL), the holding company of JIL, under the IBC.

The New Indian Express reported

FE: Jaypee infra parent moves SC against NCLAT fresh bid order

2 August 2019: Jaiprakash Associates, the parent company of embattled Jaypee Infratech (JIL), on Thursday moved the Supreme Court challenging the National Company Law Appellate Tribunal’s (NCLAT) on Tuesday order that allowed fresh bidding for the debt-laden real estate firm and also barred promoters from participating in the fresh auction.

JAL and Manoj Gaur, the CMD of the suspended management of JIL, in their joint appeal told the apex court that the NCLAT exceeded its jurisdiction and disregarded the strict and mandatory provisions of the IBC by giving another opportunity to the other resolution applicants, including state-owned NBCC and Adani, to resubmit their resolution plans, even though the same have been repeatedly been rejected.

A bench led by justice AM Khanwilar is likely to hear the case on Friday.

While challenging the NCLAT order that held JAL ineligible to submit fresh bids, Gaur asked the apex court to “exercise its extra-ordinary jurisdiction to continue with the restructuring/revival of JIL with an equitable view and consider the settlement proposal” submitted by the promoters wherein they have “strived to optimally utilise the assets of the corporate debtor to run it as going concern and settle the claims of all the stakeholders holistically without providing for any haircuts, while considering the primary objective of the IBC”.

It said that the SC had once permitted JAL to present its proposal before the committee of creditors (CoC) of JIL, but the same was merely rejected as a statutory bar stipulated under the IBC.

JAL had earlier submitted its bid to regain control over its subsidiary and had offered to pay the 100% outstanding amount to creditors without any haircut. It had also offered to complete the unfinished flats within three years.

To enable the fresh bidding process, the NCLAT had also extended the Corporate Insolvency Resolution Process (CIRP) period of JIL for another 90 days, which includes a 45-day window for the resolution professional and lenders of the debt-ridden firm to invite fresh bids. Forty five days would be used to finalise new bids and the rest to cure any discrepancies in the bids.

The appeal stated that the NCLAT had “erroneously and arbitrarily and without any adequate jurisdiction” decided on the exclusion of time especially when an application in this regard was pending before the NCLT. It said that the appellate tribunal had usurped the jurisdiction of the NCLT while holding that total 260 days out of 270 days can be excluded and also by passing an order of exclusion of 90 days from the CIRP of JIL.

Lenders had requested NCLAT to exclude the period from September 17, 2018, from the stipulated period for CIRP, as this time was taken by the NCLT to decide on the voting rights of the homebuyers. However, JAL stated that CIRP of JIL was not stalled at any point of time and this was evident from the fact that the CoC meetings were being duly conducted and decisions with regard to the operations and the resolution process were being taken regularly.

The IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around Rs 24,000 crore. The NCLT, Allahabad, had admitted the plea.

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 had started second round of bidding. While state-owned NBCC’s plan to complete the pending projects was rejected by the lenders, the Adani group is also now in the fray with its unsolicited bid.

Of the total votes polled on the NBCC’s plan, nearly 34.75% of homebuyers had voted in favour, while 1.44% had voted against. As much as 23.8% of the homebuyers had abstained from the voting process. While the homebuyers comprise 59% of the CoC, the 13 banks comprising the other 40.755 had voted against the NBCC’s bid.

The Financial Express reported

LM: NCLAT sets aside order directing return of land to Jaypee Infratech

1 August 2019: The National Company Law Appellate Tribunal on Thursday set aside an NCLT order that directed Jaiprakash Associates Ltd to return 758 acres of land, which was pledged with several banks, to debt-laden Jaypee Infratech.

In May last year, the Allahabad bench of the National Company Law Tribunal (NCLT) had asked JAL to return 758 acres of land to its subsidiary Jaypee Infratech, declaring the transfer of the land as “fraudulent” and “undervalued”. It had directed JAL to release and discharge interest created over the patch of land to lenders.

All the banks and JAL had approached the NCLAT against the NCLT order. A stay was granted to all petitioners.

In its judgement, a two-member NCLAT bench, headed by Chairman Justice S J Mukhopadhaya, allowed the pleas of all banks as well as JAL and said that the transactions were genuine and the allegation of undervaluation was not justified.

“We have held that the transactions were made in the ordinary course of business in absence of any contrary evidence to show that they were made to defraud the creditors of the Jaypee Infratech or for any fraudulent purpose, on mere allegation made by the ‘Resolution Professional,” said the NCLAT.

The appellate tribunal said that “it was not open to the NCLT to hold that mortgage deeds, in question, were made by way of transactions which come within the meaning of ‘fraudulent trading’ or ‘wrongful trading’.”

The NCLAT also said that the Allahabad bench of NCLT had passed the order “on the basis of wrong presumption and error of fact held that transactions in question amount to ‘preferential transactions’.”

“All the appeals are allowed,” said the NCLAT, adding “we set aside the impugned order dated May 16, 2018”.

The petitioner banks are: Axis Bank, Standard Chartered, ICICI Bank, SBI, Bank of Maharashtra, United Bank of India, Central Bank of India’, ‘UCO Bank’, ‘Karur Vyasa Bank , L&T Infrastructure Finance Company, ‘Canara Bank, Karnataka Bank, IFCI, Allahabad Bank, Jammu & Kashmir Bank and The South Indian Bank Ltd.

Meanwhile, the NCLAT clarified that it has made no observations against JAL, against whom some lenders have approached the NCLT to initiate insolvency proceedings.

“However, we make it clear that we have not made any observations with regard to the Promoters or Directors in absence of any appeal preferred on their behalf,” said NCLAT.

Banks have given loans to Jaiprakash Associates, JP Group’s flagship firm against the land bank owned by Jaypee Infratech.

The LiveMint reported