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Insolvency appellate tribunal NCLAT on Friday upheld Suraksha Realty's bid to acquire debt-ridden Jaypee Infratech but asked it to pay an additional Rs 1,334 crore as farmers' compensation -- a development expected to bring relief for over 20,000 homebuyers stuck in various real estate projects.
Upholding the National Company Law Tribunal's (NCLT) decision of March 2023, the NCLAT said the decision was to avoid any further delay in the implementation of the resolution plan and also to take care of the interests of all stakeholders, including home buyers and claim of Yamuna Express development authority YEIDA for additional compensation of the farmers.
The corporate Insolvency Resolution Process (CIRP) against Jaypee Infratech Ltd (JIL) was started in August 2017 over an application by the IDBI Bank-led consortium.
On March 7 last year, the NCLT approved the bid of the Mumbai-based Suraksha group to buy JIL. However, many parties, including YEIDA, filed a petition in the NCLAT TO challenge the NCLT order.
In its 99-page order on Friday, the NCLAT said, "The impugned order passed by the adjudicating authority (NCLT) insofar as it deals with the claim of the appellant (YEIDA) of Rs 1,689 crores of additional farmers compensation is set aside and the rest of the order approving the resolution plan is upheld".
"Successful Resolution Applicant (Suraksha Realty) is directed to make payment to the appellant of its secured operational debt of Rs 1,689 crore in the ratio of 79 per cent, which has been paid to other secured creditors, which amount comes to Rs 1,334.31 crore."
The NCLAT further said Suraksha Realty on April 18 has already undertaken to make a payment of Rs 1,216 crore towards additional compensation in the timeline as indicated.
"Let the SRA (Suraksha Realty) make the payment of Rs 1,216 crore as per its offer in the timeline as indicated therein. An additional amount of Rs 118.31 crore, which is required to be paid to make its payment equivalent to the payment given to other secured creditors, will also be paid as per the timeline indicated in the offer. Meaning thereby that amount of Rs 1,334.31 crore to be paid as per timeline and ratio indicated in the offer dated April 18, 2024," it said.
In its final resolution plan, the Suraksha group offered to bankers more than 2,500 acres of land and nearly Rs 1,300 crore by way of issuing non-convertible debentures. It also proposed to complete all pending flats over the next four years.
JIL's lenders had submitted a claim of Rs 9,783 crore.
The NCLAT's ruling, which came 14 months years after the NCLT gave its nod for the Suraksha group's offer, will pave the way for the completion of more than 20,000 housing units in various stalled projects of JIL spread across Noida and Greater Noida in the national capital region.
A monitoring committee, set up by Interim Resolution Professional (IRP), is taking all necessary steps for expeditious implementation of the resolution plan, the bench noted.
JIL was among the first list of 12 companies against whom the RBI had directed the banks to approach the NCLT for initiation of insolvency proceedings.
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 CoC. The company had got 0.12 per cent more votes than state-owned NBCC, which was also in the fray.
In the first round of insolvency proceedings in 2018, the Rs 7,350 crore bid of Lakshadweep, part of the Suraksha group, was rejected by the lenders.
The CoC had rejected the bids of Suraksha and NBCC in the second round held in May-June 2019.
In November 2019, the Supreme Court directed that the revised bids be invited only from NBCC and Suraksha.
Then, in December 2019, the CoC approved the resolution plan of NBCC during the third round of the bidding process.
In March 2020, NBCC got approval from the NCLT to acquire JIL. However, the order was challenged before the NCLAT and later in the Supreme Court.
On March 21, 2021, the apex court ordered a fresh round of bidding between NBCC and Suraksha Group only.
