Jaypee Infratech Insolvency: NCLAT Says Banks Can Vote Against NBCC Proposal
Pedestrians walk past residential buildings at the Jaypee Wish Town Project, developed by Jaypee Infratech Ltd., in Noida, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Jaypee Infratech Insolvency: NCLAT Says Banks Can Vote Against NBCC Proposal

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The National Company Law Appellate Tribunal has clarified that lenders can vote against NBCC (India) Ltd.’s proposal to acquire debt-ridden Jaypee Infratech, and directed for completion of the ongoing voting process.

Lenders consortium, led by IDBI Bank Ltd., had approached the NCLAT seeking permission to vote against NBCC bid. The voting process started on May 31, and will conclude on June 10. As many as 13 banks and 23,000 home buyers have voting rights.

A three-member bench headed by Chairman Justice SJ Mukhopadhaya has directed the Resolution Professional of Jaypee Infratech to report about the outcome of the voting to it.

The appellate tribunal also clarified that while declaring the results, votes of the absentees would not be counted in the total voting percentage.

"As the voting is going on, we are not inclined to pass any orders. We make it clear that if any financial creditor remains absent from voting, their voting percentage would not be counted," the Appellate Tribunal said.

NCLAT also clarified that financial institutions or lenders can vote against the NBCC proposal.

"We have not said don't vote against NBCC. We have said CoC (Committee of Creditors) may not file final report, if it is rejected," it said.

The Appellate Tribunal was hearing a batch of applications filed by banks seeking permission to vote against the NBCC approval.

In 2017, Jaypee Infratech went into insolvency process after the National Company Law Tribunal admitted an application by an IDBI Bank-led consortium seeking revival of the realty firm.

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. Later in October 2018, interim Resolution Professional Anuj Jain started the second round of bidding process to revive Jaypee Infratech on the NCLT's direction and the process is still ongoing.

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