NCLAT refuses to stay Jaypee Infratech creditors' voting on NBCC plan

Committee of Creditors are likely to decide on NBCC plan for Jaypee Infratech in a meeting this week.

The National Company Law Appellate Tribunal (NCLAT) refused Tuesday to stay voting by Committee of Creditors (CoC) of Jaypee Infratech Limited (JIL) in which the lenders are set to decide on NBCC India Limited’s offer for the debt-laden realty firm.

The final decision of JIL’s lenders will, however, be subject to the outcome of an appeal filed by ICICI Bank and other lenders.

Last May, the Allahabad bench of NCLT had ordered Jaiprakash Associates Limited (JAL) to return 858 acres of land to JIL. The parent firm JAL had mortgaged this land pool with lenders such as State Bank of India, ICICI Bank, IDBI Bank, and Standard Chartered Bank to obtain loans. The land was transferred by JAL to itself after the lenders had started classifying the accounts of its subsidiary JIL as non-performing asset. The banks had approached the NCLAT against the NCLT order and the case is still sub judice.

ICICI Bank and others had on Tuesday 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.

A meeting of Jaypee Infratech’s CoC is likely to take place this week in which the lenders will vote on the revised offer of NBCC India Limited to acquire the realty firm through insolvency proceedings. The voting process is likely to start on Thursday and end by Sunday.

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 for I-T liabilities to be extinguished and a dispensation from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer is granted. The CoC considered NBCC's offer after it rejected Mumbai-based Suraksha Realty's bid on May 3, through voting process.

NBCC had demanded for I-T liabilities to be extinguished and a dispensation from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer is granted. Earlier Anuj Jain, the interim resolution professional, had in a letter to the CoC, categorically said that the state-run infrastructure firm’s proposal is conditional and based on being granted relief from income-tax (I-T) liabilities.

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.

NBCC has suggested that banks should raise about Rs 2,000 crore against the expressway and provide half of the amount to the public sector undertaking, which it will utilise as an upfront payment. NBCC will also fund the gap of about Rs 1,500 crore between estimated construction cost and receivables from customers.

(With inputs from PTI)