In what could bring cheer to homebuyers stuck in Jaypee's real estate projects, NCLAT has observed that to keep a company 'a going concern and for maximisation of assets', the only way is to complete the infrastructure and allot it to the allottees.
It directed that representatives of banks, buyers and other stakeholders of the embattled firm appear before it on July 17 to consider how the NBCC bid could be 'recast' in a manner that is beneficial to all.
‘In a real estate business, the business is limited to a particular project and primary business is to allot constructed area to the allottees. For keeping the company a going concern and for maximization of the assets, the only way is to complete the infrastructure and to allot it to the allottees,’ the NCLAT order said.
Emphasising that the appellate tribunal's priority is to take care of the interest of the homebuyers, the bench asked the representatives of various stakeholders involved to appear before it in the next hearing.
'For hearing such issue, we intend to hear one of the representative of the lenders (Banks), representative of the NBCC (Resolution Applicant) who is dealing with the 'Resolution Plan', representative of the allottees (one or two lawyers), Resolution Professional and other stakeholders (representative of 'fixed deposit holders') to know as to what are the factors to be noticed in a proposed 'resolution Plan' for the purpose of finding out the validity and feasibility and other aspects and whether the NBCC should be allowed to recast its plan in a manner which is beneficial to the Allottees and which may amount to maximization of the assets of the 'Corporate Debtor' and other stakeholders including the lenders, fixed deposit holders,' the order said.
It also directed the Committee of Creditors to produce the gist of the resolution plan submitted by the NBCC by filing a chart showing the objection, if any, which the dissenting members of the CoC raised for rejecting the plan.
Legal experts termed the NCLAT order as 'purposive and with a clear intent' to resolve the deadlock between banks and NBCC for the benefit of homebuyers who had voted overwhelmingly for NBCC's resolution plan.
They said that the order shows that NCLAT has expressed its willingness to intervene and resolve issues on which there are differences between the banks and the government’s construction arm and therefore there is hope for homebuyers.
NCLAT may prevail over both parties to agree to something that is agreeable. If banks act tough, it may issue a set of directions to come around. There may be a bit of give and take. Both NBCC and IDBI may have to step back on their hardline positions and agree to resolve their differences, they said.
The tribunal was informed on July 2 that in the voting that took place on NBCC's bid, 34.75 per cent of home buyers voted in favour, 1.44 per cent voted against, whereas 23.8 per cent did not vote. However, all the 13 banks, which constitute 40.75 per cent of Committee of Creditors (CoC) voted against the bid by the state-run firm to acquire Jaypee Infratech. The voting started on May 31 and concluded on June 10.
Homebuyers have nearly 60 per cent voting right in the CoC.
During the hearing on the matter, the three-member bench headed by Justice Chairman SJ Mukhopadhyaya said it was not keen on considering Adani Group's bid at this stage while pulling up the banks for backdoor negotiations with the business conglomerate.
The bench also said NBCC is a government company and one can rely on it, adding that it knows "the pain of allottees" and wants to do justice for them.
In its revised offer, NBCC has proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore to banks and completing construction of flats by July 2023 to settle an outstanding claim of Rs 23,723 crore of financial creditors.
Lenders have had reservations on certain relief and concessions sought by NBCC in its bid. Clarifications from the NBCC were sought in the wake of IRP Anuj Jain flagging to the lenders that the state-owned firm's bid was conditional and non-binding because of the two conditions.
NBCC had put several conditions for the implementation of its plan, including a demand to extinguish an estimated income-tax liability of Rs 33,000 crore over a period of 30 years arising out of the transfer of land parcels from Yamuna Expressway Industrial Development Authority (YEIDA) to Jaypee Group and seeking permission from YEIDA for any business transfer.
As many as 13 banks and over 23,000 homebuyers have voting rights in the CoC of Jaypee Infratech. Homebuyers represent nearly 60 per cent of voting rights, while banks have the rest. For approval of any resolution plan, at least 66 per cent votes should be in favour.
In a related development on July 2, fearing that there was "threat" of embattled real estate firm Jaypee Infratech Limited going into liquidation is "turning into a reality with each passing day," a group of homebuyers led by Chitra Sharma, a Delhi resident who had first questioned the constitutional validity of the insolvency code two years ago, has moved the Supreme Court seeking its intervention to protect their interests. The apex court has decided to hear their plea next week.
Jaypee Infratech went into insolvency process in 2017 after the NCLT admitted an application by an IDBI-Bank-led consortium seeking resolution of the realty firm. In the first round of insolvency proceedings, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. Later in October 2018, the Interim Resolution Professional (IRP) started the second round of bidding process to revive Jaypee Infratech on the direction of NCLT.
vandana.ramnani@nw18.com
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