In a boost to homebuyers and lenders of Jaypee Infratech, an appellate tribunal on Tuesday directed the appointed resolution professional (RP) to call fresh bids for resolution of the real estate developer.
It also excluded a period of 90 days from insolvency proceedings thus far, granting additional time under the 270-day resolution timeline. Jaypee Infratech has failed to deliver around 23,000 flats and owes over Rs 9,800 crore to lenders.
The National Company Law Appellate Tribunal (NCLAT) barred Jaypee Infratech’s parent company Jaiprakash Associates Ltd. (JAL) from participating in the process.
JAL argued against the exclusion as expiry of the timeline would send Jaypee Infratech into liquidation which would put JAL in prime position to retake control of the firm by allowing it reaching an agreement with lenders and homebuyers.
“We exclude 90 days for the purpose of counting 270 days in the corporate insolvency resolution process,” ordered a two-member bench, adding that this time period may be used by the RP and committee of creditors (CoC) to complete the bidding process preferably within 45 days giving the remaining time to the adjudicating authority to settle remaining issues.
The bench called on government owned NBCC, whose bid for Jaypee Infratech was rejected by the CoC, and other prospective bidders to file fresh resolution plans but did not grant liberty to JAL to participate in bidding as the Supreme Court had declared JAL ineligible and had allowed the RBI to direct lenders to initiate insolvency proceedings against it.
However, JAL may challenge this ruling in the apex court as Section 12(A) in the Insolvency and Bankruptcy Code, which allows for the withdrawal of insolvency application, was introduced after the aforesaid ruling by the apex court.
Sources told ET that homebuyers may support a motion to declare JAL eligible to bid as it has offered the best terms to homebuyers. Counsel for JAL said that they were willing to pay creditors 100% of their dues and provide the flats in three years as well as pay 100% delay compensation and one year free maintenance. Adani Infrastructure has also expressed interest with a plan that would infuse Rs 1,700 crore.
