Supreme Court Seeks Revised Plan From NBCC On Completing Stalled Jaypee Group Projects
Tower cranes operate while laborers work on residential buildings under construction at the Jaypee Wish Town Project, developed by Jaypee Infratech Ltd., in Noida, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)  

Supreme Court Seeks Revised Plan From NBCC On Completing Stalled Jaypee Group Projects

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The Supreme Court on Tuesday sought to know from state-owned NBCC (India) Ltd. whether it is 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 said if NBCC, whose two proposals have been rejected earlier by lenders of the defaulting Jaypee Group, is not willing to submit a revised plan, then it may look for other alternatives.

A bench of Justices AM Khanwilkar and Dinesh Maheshwari issued notice to the National Buildings Construction Corporation Limited and sought its reply by Sept. 5.

“We are issuing notice to the NBCC returnable by Thursday. Let us see what it has to offer. In view of the suggestions made we would like to know from the NBCC whether it would be in a position to submit a revised plan to address the aspirations of various stakeholders,” the bench said.

Additional Solicitor General Madhavi Divan, appearing for the Centre, said the government has 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.

“Three meetings have been held by the government with various stakeholders in the case. Voting rights have also been given to home buyers through legislative amendments, which has not been stayed by any court. There is staggering debt of hundred of crores of the Group and Union of India can consider giving concessions on tax dues and enhanced compensation payable to farmers only if NBCC is brought into picture,” Divan said.

She 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.

Senior advocate Anupam Lal Das, appearing for the Jaypee group, said the new amendments would not apply in this case and so far NBCC has submitted two proposals but it has been voted out by the lenders.

The top court said the NBCC proposal may be accepted if most of the lenders have accepted it barring a few, who have voted against it.

Senior advocate Fali S Nariman, also appearing for Jaypee Group, took a contrary stand from that of Das and said that it may not have any objection if the NBCC is allowed to give a revised proposal, but the debt-laden 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.

Nariman said this option should also be considered as and when the court looks into NBCC's revised proposal.

“Jaypee Group has a scheme to offer in which all pending dues will be paid to the banks without any haircut. NBCC is welcome but the court should also look into my proposal before arriving at any conclusion,” he said.

Das supplemented the arguments of Nariman and said that Jaypee Group's proposal has neither been accepted nor evaluated so far and as per provisions of law, it has right to make a proposal.

The bench said it will first look what NBCC has to offer and only then it may look into Jaypee group's fresh proposal.

“We will look into it but only after this (NBCC offer) option is exhausted. We will consider all aspects but too many offers will complicate the case. Although the best way is winding up the company but many of you don't want any such steps to be taken. We think first let NBCC give its proposal. We are not closing your option but it will be opened only after we see what NBCC has to offer,” the bench said.

During the hearing, Divan said, “Government has to step into the picture as a mess was created by the promoter.”

The bench posted the matter for further hearing on Sept. 5 and extended the status quo order till then on the insolvency proceedings.

On Aug. 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, 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 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 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 Committee of Creditors of Jaypee Infratech, to submit fresh resolution plan for the debt-ridden company.

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