The Supreme Court Wednesday remitted to the Committee of Creditors (CoC) the issue of approval of resolution plan for debt-ridden Jaypee Infratech Ltd (JIL), saying no new expression of interest will be entertained for taking over the firm and only state-owned NBCC and Suraksha Realty may file revised proposals. The top court also directed that the resolution process be extended by 45 days.
Since August 2017, when JIL went into the insolvency process after the National Company Law Tribunal (NCLT) admitted the application by an IDBI Bank-led consortium, this is the fourth round of litigation which has been decided by the top court.
On March 3 last year, the NCLT had approved NBCC's bid to acquire JIL through the insolvency process and complete over 20,000 pending flats over the next three and half years. The order was however challenged in the appellate tribunal NCLAT and later in the Supreme Court.
A bench of Justices A M Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna used the top court's plenary powers under Article 142 of the Constitution to do "substantial and complete justice to the parties and in the interest of stakeholders of JIL".
"The matter regarding approval of the resolution plan stands remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment," the bench said in its 375-page verdict.
It also held that Rs 750 crore deposited by Jaypee group in the top court and later transferred to NCLT is the property of Jaiprakash Associates Ltd (JAL) and the stipulations in the resolution plan concerning its usage by JIL or the resolution applicant cannot be approved.
It said, "However, the final treatment of the said amount of Rs 750 crores with accrued interest shall be determined by NCLT after the reconciliation of accounts between JAL and JIL and in terms of the directions contained in this judgment".
The bench directed the Interim Resolution Professional (IRP) to complete the Corporate Insolvency Resolution Process (CIRP) within the extended time of 45 days from Wednesday.
"For this purpose, it will be open to the IRP to invite modified/fresh resolution plans only from Suraksha Realty and NBCC respectively, giving them time to submit the same within 2 weeks from the date of this judgment," the bench said.
The top court, which passed its verdict on a batch of appeals against the NCLAT's last year order and fresh petitions, said: "It is made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum".
The bench, which decided the case in fourth round of litigation in the top court, said that the resolution applicants will be expected to proceed on the basis of the information memorandum already issued by IRP and also take into account the facts noticed and findings recorded in this judgment.
It added that the "IRP shall take all further steps in the manner that the processes of voting by the Committee of Creditors and his submission of report to the Adjudicating Authority (NCLT) are accomplished in all respects within the extended period of 45 days from the date of this judgment.
"The Adjudicating Authority shall take final decision in terms of Section 31 of the Code (Insolvency and Bankruptcy Code) expeditiously upon submission of report by the IRP".
The bench said that its directions, particularly for enlargement of time to complete the process of CIRP, are being issued in exceptional circumstances of the present case and shall not be treated as a precedent.
It said the proceedings contemplated in its verdict shall be taken up by the Principal Bench of the NCLT at New Delhi.
On August 6 last year, the top court had transferred to itself the appeals pending before the National Company Law Appellate Tribunal (NCLAT) against the NBCC plan to acquire JIL and construct over 20,000 pending flats.
It had also stayed the operation of the April 22, last year order of the NCLAT till the next date of hearing by which it had given conditional go-ahead to state-owned-NBCC to acquire JIL and construction of stalled projects.
The NCLAT had asked NBCC to implement its proposal to acquire debt ridden JIL and complete over 20,000 pending flats, but said that its direction was subject to its final order.
The NCLAT's direction had come over a plea moved by the NBCC, which won the bid to acquire JIL. The NBCC has challenged the modifications made by the NCLT in the original resolution plan submitted by it and as approved by the CoC of JIL.
While approving the resolution plan of NBCC, the NCLT had allowed objections of ICICI Bank and Yamuna Expressway Industrial Development Authority and directed payment to unclaimed Fixed Deposit Holders.
The NCLT had also ordered that the Rs 750 crore deposited by Jaypee Infratech's parent firm JAL with the registry of the Supreme Court would be part of the resolution plan saying that it will help NBCC in faster completion of stalled projects of Jaypee Group.