NBCC Challenges Modifications To Its Successful Jaypee Infratech Bid
The appellate tribunal has agreed to hear a challenge by state-run NBCC (India) Ltd. against modifications to its bid for Jaypee Infratech Ltd. when it was approved by the insolvency court.
The National Company Law Appellate Tribunal, however, declined to stay the implementation of the modified resolution plan. The NCLAT issued notice to ICICI Bank Ltd., the dissenting creditor entitled to cash payment after the modification; IDBI Bank Ltd., the lead lender of the consortium that initiated insolvency proceedings; and the interim resolution professional.
“Till further orders, the approved ‘resolution plan’ may be implemented subject to outcome of this appeal,” said a bench headed by Justice Bansi Lal Bhat, acting chairperson of the NCLAT. “The interim resolution professional may constitute ‘interim monitoring committee’ comprising of the ‘successful resolution applicant’ [NBCC] … and the three major institutional financial creditors, who were members of the ‘Committee of Creditors.”
The case will come up for hearing next on May 15.
The insolvency resolution of Jaypee Infratech, among the first 12 stressed accounts, was completed in the third round after the Supreme Court saved it from liquidation in the interest of thousands of homebuyers and then ordered biding twice. While the NCLT finally approved NBCC’s offer on March 3, it allowed the objections by ICICI Bank and Yamuna Expressway Industrial Development Authority, and also directed payment to unclaimed fixed deposit holders.
The tribunal ordered that ICICI Bank should be paid an amount equivalent to what it would have received in the event of liquidation, along with interest, in 12 instalments. The resolution plan originally provided for land and equity as payment to ICICI Bank.
NBCC moved the appellate tribunal, arguing that the NCLT could not have interfered with the business decision of the Committee of Creditors taken by the prescribed voting shares, and the tribunal exceeded its jurisdiction by ordering modifications.