 "NCLAT's nod to Sterling Biotech for settlement with lenders baffles experts")
Insolvency appellate tribunal NCLAT on Tuesday said it will hear the plea of Yamuna Expressway Industrial Development Authority (YEIDA), which challenged the NCLT's order to approve Suraksha Group's bid to acquire debt-ridden Jaypee Infratech.
However, the National Company Law Applette Tribunal (NCLAT) declined to stay the order passed by the National Company Law Tribunal on March 7 and said the matter requires an early decision.
Finding "substantial merit" in the YEIDA's appeal for higher compensation to farmers, the NCLAT issued notices to the Suraksha Group as well as the monitoring panel constituted to implement the resolution plan on YEIDA's petition.
A two-member bench, headed by Chairman Justice Ashok Bhushan, said the appeal filed by YEIDA on NCLT judgment "requires an early decision".
The appellate tribunal further noted that the NCLT in its order dated March 7, 2023 "has virtually extinguished the claim of the appellant (YEIDA) of additional farmers compensation by allocating an amount of Rs 10 lakh, which according to the respondents (Suraksha group and monitoring committee) is the amount to which the appellant is entitled and the said judgment under challenge in this appeal, we have found substantial ground to entertain this appeal and hear the appeal."
The bench further said it had found substantial ground to entertain YEIDA's appeal.
"We are of the view that the impugned judgment of the NCLT, insofar as determination of the claim of YEIDA regarding additional compensation, shall not be relied for any determination between the appellant and the corporate debtor (JIL) regarding liability and entitlements of respective parties in respect of bearing of the additional farmers compensation claim," it said.
However, the NCLAT also clarified that there would be no stay over implementation of the Suraksha group's resolution plan.
"We make it clear that pendency of this appeal and the above interim order may not be treated as any restraint in implementation of the plan insofar as other aspects of the plan are concerned," it said
In the meantime, NCLAT also directed that NCLT order "shall not be relied in determination of rights and liabilities of the appellant and the corporate debtor in the pending proceedings in arbitration pending before the commercial court".
YEIDA, which had entered into a concession agreement with Jaypee in February 2003, had filed claims for Rs 6,111.59 crore, mainly on account of pending works and External Development Charges (EDCs), unexecuted external development works and other future works.
It had also sought 64.7 per cent additional compensation payable to farmers, from whom it had acquired land. Accordingly, YEIDA had raised a demand/claim of approximately Rs 1,689 crore towards the additional compensation payable to the farmers.
However, NCLT rejected the claims saying that it "find no illegality committed by the SRA/Suraksha by treating the claim of YEIDA as an operational debt and making a provision towards its payment in accordance with the provisions of IBC, 2016".
The Corporate Insolvency Resolution Process (CIRP) against JIL started in August 2017 on an application filed by IDBI Bank-led consortium.
In the fourth round of the bidding process to find a buyer for JIL in 2021, the Suraksha Group won the bid with 98.66 per cent votes. As many as 12 banks and more than 20,000 homebuyers have voting rights in the Committee of Creditors (CoC).
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
