Jaiprakash Associates

NCLAT sets aside order directing return of land to Jaypee Infratech

NCLAT sets aside order directing return of land to Jaypee Infratech

August 2, 2019 in Jaiprakash Associates

NEW DELHI: The National Company Law Appellate Tribunal on Thursday set aside an NCLT order that directed Jaiprakash Associates Ltd to return 758 acres of land, which was pledged with several banks, to debt-laden Jaypee Infratech. In May last year, the Allahabad bench of the National Company Law Tribunal (NCLT) had asked JAL to return 758 acres of land to its subsidiary Jaypee Infratech, declaring the transfer of the land as “fraudulent” and “undervalued”. It had directed JAL to release and discharge interest created over the patch of land to lenders.
All the banks and JAL had approached the NCLAT against the NCLT order. A stay was granted to all petitioners.
In its judgement, a two-member NCLAT bench, headed by Chairman Justice S J Mukhopadhaya, allowed the pleas of all banks as well as JAL and said that the transactions were genuine and the allegation of undervaluation was not justified.
“We have held that the transactions were made in the ordinary course of business in absence of any contrary evidence to show that they were made to defraud the creditors of the Jaypee Infratech or for any fraudulent purpose, on mere allegation made by the ‘Resolution Professional,” said the NCLAT.
The appellate tribunal said that “it was not open to the NCLT to hold that mortgage deeds, in question, were made by way of transactions which come within the meaning of ‘fraudulent trading’ or ‘wrongful trading’.”
The NCLAT also said that the Allahabad bench of NCLT had passed the order “on the basis of wrong presumption and error of fact held that transactions in question amount to ‘preferential transactions’.”
“All the appeals are allowed,” said the NCLAT, adding “we set aside the impugned order dated May 16, 2018″.
The petitioner banks are: Axis Bank, Standard Chartered, ICICI Bank, SBI, Bank of Maharashtra, United Bank of India, Central Bank of India’, ‘UCO Bank’, ‘Karur Vyasa Bank , L&T Infrastructure Finance Company, ‘Canara Bank, Karnataka Bank, IFCI, Allahabad Bank, Jammu & Kashmir Bank and The South Indian Bank Ltd.
Meanwhile, the NCLAT clarified that it has made no observations against JAL, against whom some lenders have approached the NCLT to initiate insolvency proceedings.
“However, we make it clear that we have not made any observations with regard to the Promoters or Directors in absence of any appeal preferred on their behalf,” said NCLAT.
Banks have given loans to Jaiprakash Associates, JP Group’s flagship firm against the land bank owned by Jaypee Infratech.

Sources: realty.economictimes.indiatimes.com

Centre to back NBCC to finish Jaypee Infratech projects

Centre to back NBCC to finish Jaypee Infratech projects

August 1, 2019 in Jaiprakash Associates

NEW DELHI: After Amrapali and Unitech, the government is now looking to back public sector builder NBCC to construct the remaining 25,000 Jaypee Infratech apartments and villas in and around Noida.
During a meeting called by finance minister Nirmala Sitharaman, the Centre agreed to look at an arrangement to deal with pending tax claims up to August 2017 when insolvency proceedings were initiated against Jaypee Infratech.
While the tax issues for the remaining period will be looked at in the context of the amended Insolvency & Bankruptcy Code, where the resolution plan cleared by the National Company Law Tribunal (NCLAT) is binding on authorities, the Uttar Pradesh government and other agencies will also be asked to review their claims, sources told TOI.
NBCC’s earlier proposal had faced resistance as it was a conditional offer and depended on the state government and tax authorities reviewing their claims.

Sources: realty.economictimes.indiatimes.com

NCLAT asks IDBI Bank to furnish conditions for fresh bidding for Jaypee

NCLAT asks IDBI Bank to furnish conditions for fresh bidding for Jaypee

July 18, 2019 in Jaiprakash Associates

The National Company Law Appellate Tribunal (NCLAT) Wednesday directed IDBI Bank, the lead lender of debt-ridden Jaypee Infratech, to file an affidavit listing out new terms and conditions if a fresh round of bidding is conducted. A two-member bench headed by Chairman Justice S J Mukhopadhaya has asked IDBI Bank to file an affidavit by Friday in this regard. The appellate tribunal has listed the matter for next hearing on Monday.
“Counsel appearing for lenders is allowed to file new terms and conditions in case fresh bidding takes place,” the bench said.
In the second round of bidding, the committee of creditors (CoC) had first rejected the resolution plan of Suraksha Realty and then voted against state-owned NBCC’s offer.
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.
All the 13 banks, which constitute 40.75 per cent of CoC, voted against the bid by the state-run firm to acquire Jaypee Infratech. Home buyers have nearly 60 per cent voting rights in the CoC.
In its hearing Wednesday, the appellate tribunal has suggested some guidelines for new terms and conditions.
“All allottees would be given flats according to their builder buyer agreement. If allottee not present then CoC has to decide how it has to be adjusted,” the bench said.
“Land attached to the building and with common area amenities would remain with the allottees,” it added.
Meanwhile, NCLAT also orally suggested to the counsel representing the Adani Group to improve its bid. Adani has made an unsolicited offer to acquire the debt-laden realty firm.
Jaypee Infratech went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted an application filed by an IDBI Bank-led consortium.
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, the IRP started the second round of bidding process.

Sources: realty.economictimes.indiatimes.com

Jaypee homebuyers oppose NCLAT order

Jaypee homebuyers oppose NCLAT order

July 17, 2019 in Jaiprakash Associates

NEW DELHI: A group of homebuyers has approached the Supreme Court challenging the National Company Law Appellate Tribunal (NCLAT) order allowing NBCC and creditor bank to thrash out resolution plan to take over Jaypee Infratech, even after the plan was rejected by a committee of creditors (CoC) which included homebuyers.
The petition has been filed by a group 1000 homebuyers alleging that the NCLAT order passed on July 2 was in violation of Insolvency and Bankruptcy Code (IBC) as statutory period of 270 days for wrapping up Corporate Insolvency Resolution Process had expired and the tribunal had extended the deadline in violation of law.
“The NCLAT’s impugned order while recording that the resolution plan submitted by NBCC was rejected by the CoC has sought to set aside such rejection and to further reopen such negotiations, usurping the powers/functions, of the NCLT, COC and Resolution Professional, especially when the statutory period for completion of CIRP as stipulated under IBC has expired,” the petition filed by advocate M L Lahoty said.
With creditors rejecting NBCC’s bid to acquire Jaypee Infratech, the NCLAT had directed representatives of banks, allottees and other stakeholders to appear before it on July 17 to sort out differences on the NBCC attempt and consider how the bid could be tweaked for the benefit of homebuyers. During voting, majority of CoC had rejected NBCC’s bid to acquire Jaypee Infratech.
Challenging the order, the petitioners said, “The NCLAT has erroneously usurped the functions/ powers of the resolution professional wherein NCLAT has sought to call the representatives of the financial creditors, the resolution applicant, the resolution professional, the allottees and the fixed deposit holders for conducting such renegotiation for the resolution plan on July 17 especially when the resolution plan has already been rejected once by the majority of the creditors after the expiry of the statutory period.”
The homebuyers also expressed reservations against allowing NBCC to complete the unfinished housing projects of Jaypee and pleaded the apex court to pass order for protection of homebuyers. “The experience of over 48,000 homebuyers of Amrapali with regard to NBCC is extremely frustrating since NBCC refused to invest or arrange any funds for construction of the projects due to which no further construction work is being carried out,” the petition said.
The apex court had on July 11 assured homebuyers that it would intervene to protect the interests of Jaypee homebuyers if the resolution plan under insolvency proceedings failed and asked all parties including NBCC and creditor banks to sort out differences.

Sources: realty.economictimes.indiatimes.com

Will protect your interests, SC tells Jaypee homebuyers

Will protect your interests, SC tells Jaypee homebuyers

July 12, 2019 in Jaiprakash Associates

NEW DELHI: The Supreme Court on Thursday said it would intervene to protect Jaypee homebuyers if the resolution plan under the insolvency proceedings failed. It may step in to stop liquidation of the company to safeguard buyers’ investment. It asked all the parties, including NBCC and creditor banks, to sort out differences over the plan.
Having failed to come up with a policy to protect the interests of homebuyers, the Centre urged a bench headed by Justice A M Khanwilkar to adjourn the hearing as the case was listed before the National Company Law Appellate Tribunal (NCLAT) on July 17 for a final decision on the resolution plan. The court posted the hearing for July 18. It said the parties should explore all possibilities to pave the way for other builders to take over Jaypee Infratech Ltd which is facing insolvency proceedings.
As the homebuyers urged the bench to pass an interim order to stop liquidation of the company, the bench assured them that their interests would be protected. “We should wait for the outcome of the tribunal proceedings. We also want the government to explore all possibilities. If the proposal (resolution plan) given to the tribunal is acceptable to all, then the problem will be solved,” the bench said.
Jaypee Infratech went into insolvency in 2017 after the National Company Law Tribunal admitted an application by an IDBI Bank-led consortium seeking action under the Insolvency and Bankruptcy Code.
With creditors rejecting NBCC’s bid to acquire Jaypee Infratech, the NCLAT had directed representatives of banks, allottees and other stakeholders to appear before it on July 17 to consider how the bid could be tweaked for the benefit of homebuyers.

Sources: realty.economictimes.indiatimes.com

Jaypee lenders slammed for ‘back door’ talks with Adani

Jaypee lenders slammed for ‘back door’ talks with Adani

July 3, 2019 in Jaiprakash Associates

NEW DELHI: The National Company Law Appellate Tribunal has called out lenders of Jaypee Infratech for engaging in “backdoor negotiations” with the Adani group on the resolution of the debt-laden real estate company after the committee of creditors rejected a revised resolution plan proposed by government-owned NBCC.
Adani group had submitted a non-binding proposal to lenders of Jaypee Infrastructure, offering to infuse Rs 1,700 crore in fresh equity and begin delivery of flats to homebuyers within nine months, according to a counsel for the lenders. The group has also offered to pay .`1,000 crore to settle dues of workmen and financial creditors.
A three-member NCLAT bench led by Justice SJ Mukhopadhaya was not convinced. “NBCC is a government company. One can rely on it,” the bench said. “How do you know that they (Adani Group) will complete the projects within nine months? If Jaypee Infratech cannot complete, they will not complete. They don’t have experience in infrastructure.”
The bench directed representatives of lenders, homebuyers, directed representative of lenders, homebuyers, NBCC and other stakeholders to appear before it to modify the plan to make it acceptable to all stakeholders after it was informed that the bid by NBCC had not been approved by the committee of creditors (CoC).
NBCC had proposed to infuse Rs 200 crore as equity to finish incomplete projects by 2023 and transfer 950 acres of land worth Rs 5,000 crore to lenders.
Ramji Srinivas, counsel for IDBI, said lenders have opposed the NBCC bid in part because it required that lenders provide an additional Rs 1,400 crore to NBCC for the completion of the projects.
A counsel for the resolution professionals said homeowners constituting 34.75% of the CoC had approved NBCC’s resolution plan under the Insolvency and Bankruptcy Code (IBC), while all lenders representing 40.70% of CoC rejected the plan. Homebuyers representing about 23.8% of CoC abstained from voting while 1.44% voted against the NBCC bid.
A resolution plan requires the approval of at least 66% of CoC to be accepted.
Jaypee Infratech has total outstanding debt of around Rs 9,800 crore and has failed to deliver flats to over 23,000 homebuyers. Homebuyers form around 60% of the committee of creditors while 13 lenders constitute the remaining 40%.
The NCLAT bench stressed that its priority was to provide a resolution to homebuyers and that it would decide in this case that the maximisation of assets on the cases involving allottees may be defined by the maximization of the flats that can be provided to allottees. “We are not bothered about the banks, we are bothered about allottees,” the bench said, adding that if no resolution plan was accepted, the bench may allow the promoters to enter into an agreement with homebuyers as a separate class of creditors to complete the housing projects.

Sources: realty.economictimes.indiatimes.com

NCLAT directs NCLT to decide on IBC plea against JP Associates in six weeks

NCLAT directs NCLT to decide on IBC plea against JP Associates in six weeks

July 2, 2019 in Jaiprakash Associates

NEW DELHI: The NCLAT Monday directed the National Company Law Tribunal to decide the insolvency plea filed by ICICI Bank against Jaiprakash Associates in six weeks.
The private sector lender had approached the National Company Law Appellate Tribunal (NCLAT), seeking a direction to NCLT Allahabad-bench to expedite the hearing on its insolvency petition against Jaypee Group firm Jaiprakash Associates Ltd (JAL).
Hearing the matter, a three-judge bench of the NCLAT headed by Chairman Justice S J Mukhopadhyaya directed the NCLT Allahabad to decide on admitting the plea preferably in six weeks.
In September 2018, ICICI Bank had filed a petition before the NCLT Allahabad bench seeking to start insolvency proceedings against JAL, which is into infrastructure and real estate space.
In its plea before the appellate tribunal, the bank had submitted that there has been no progress in its petition filed before the NCLT Allahabad in last nine months.
JAL’s subsidiary Jaypee Infratech is already going through corporate insolvency resolution process (CIRP).
According to the bank, JAL owes around Rs 1,296 crore and it had approached the NCLT to recover the dues by filing an insolvency plea against JAL, under section 7 of Insolvency & Bankruptcy Code (IBC).
However, JAL challenged the petition before the Allahabad High Court but the same was rejected. JAL then moved the Supreme Court, which too refused to stay the application.

Sources: realty.economictimes.indiatimes.com

Jaypee Infratech creditors to meet on Jun 20 to decide future course

Jaypee Infratech creditors to meet on Jun 20 to decide future course

June 16, 2019 in Jaiprakash Associates

NEW DELHI: Jaypee Infratech’s creditors, which include banks and home buyers, will meet on June 20 to assess the progress of the ongoing insolvency process and decide future course of action. The meeting has been called days after majority of banks voted against state-owned NBCC’s bid to acquire the debt ridden realty firm.
A meeting of Committee of Creditors (CoC) will be held on June 20, 2019, Jaypee Infratech’s Interim Resolution Professional (IRP) Anuj Jain said in a regulatory filing.
He did not disclose the agenda of the meeting.
Sources, however, said that the CoC has been called to discuss the status update of the ongoing insolvency proceedings and the way forward.
A majority of lenders voted against NBCC’s bid on June 10 but most home buyers wanted the state-owned company to takeover the debt-laden realty firm, sources had said.
The National Company Law Appellate Tribunal (NCLAT) had clarified on June 10 that it did not bar lenders from voting against NBCC’s resolution plan. It also directed IRP to report the outcome of voting process directly to it. The NCLAT also advanced the date of next hearing to July 17 from July 2.
The exact percentage of votes in favour and against the NBCC’s takeover plan was not disclosed due to an insolvency court order.
The sources had said the bid possibly did not muster the requisite nod of two-third of lenders and buyers.
The voting result is to be placed before the NCLAT.
In most bankruptcy proceedings, lenders have the right to vote for or against a resolution plan for a debt-laden firm. In the case of realty firms, home buyers also have voting rights at par with lenders.
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.
Bankers had reservation with the NBCC’s bid because of certain concession sought by the state-owned firm related to future tax liabilities and approval from development authority YEIDA for transfer of land and Yamuna Expressway.
This is the second round of bidding process to revive Jaypee Infratech, which went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) admitted an application filed by an IDBI Bank-led consortium.
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, the IRP started the second round of bidding process.
Early last month, the CoC rejected Suraksha Realty’s bid. On May 30, the CoC decided to put on vote NBCC’s bid even as bankers had reservations against the proposal. The voting process, which started on May 31, concluded on June 10.
Last week, lenders filed a petition before the NCLAT to allow them to vote against NBCC’s bid in an ongoing insolvency process. They also pleaded that other options should be explored, including considering of other bids or initiating fresh expression of interest.
Adani group recently made an unsolicited and non-binding bid to acquire Jaypee Infratech.

Sources: realty.economictimes.indiatimes.com

Jaypee Infratech home buyers may stop paying EMIs

Jaypee Infratech home buyers may stop paying EMIs

June 9, 2019 in Jaiprakash Associates

NEW DELHI: As the voting process on the NBCC’s bid for Jaypee Infratech (JIL) ends on Monday, with no signs of the public sector enterprise getting through, sources say, home buyers plan to stop paying the ongoing EMIs (equated monthly installment) as many of them have “lost hope of a resolution”.
The online voting on the NBCC’s bid started on May 31.
The bid would require 66 per cent votes in its favour to make the cut and acquire the insolvent realty company. The home buyers, who are mostly in favour of the bid, have a vote share of around 58 per cent, but of the total 22,000 home buyers, only 9,000 have voted so far, further declining the weight on the NBCC’s bid.
IDBI Bank, the prime lender to JIL, which has around 18 per cent vote share is already against the bid on the ground of the resolution plan being “conditional”.
A member of the home buyers association told IANS: “Now we are telling people (the home buyers) that we should stop paying our EMIs. This is going to be our next step.”
“There are a couple of hearings, after which I think, we will take this stand… All the home buyers would have to stop paying EMIs, because if only one or two stop… it won’t help. It has to be mass step.”
Around 70 per cent of the 22,000 home buyers took loans, he noted.
JIL went into the insolvency process in 2017 after the National Company Law Tribunal (NCLT) admitted an application by IDBI Bank-led consortium seeking resolution of the realty firm. In the first round of insolvency proceedings, a Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
In October 2018, interim resolution professional (IRP) Anuj Jain started the second round of bidding process. In May this year, the Committee of Creditors (CoC) rejected a bid of Suraksha Realty through a voting process, following which, the CoC decided to consider NBCC’s offer.
The CoC eventually decided to put on vote the revised offer of the NBCC. Although homebuyers favoured the voting process, the IDBI Bank-led lenders dissented as the bid was seen as conditional.
The NBCC’s bid seeks the cancellation of an estimated income tax liability of Rs 33,000 crore due over a period of 30 years under the concession agreement for the transfer of land from the Yamuna Expressway Industrial Development Authority (YEIDA) to Jaypee Infratech Limited (JIL).
The PSU also sought relief from taking consent of the YEIDA for any business transfer between JIL and Yamuna Expressway SPV for transfer of assets as well as land parcels from JIL to the land bank “special purpose vehicle” (SPV).
The CoC asked the state-run construction major to clarify on the conditions and also sought their removal from the plan. The NBCC made some minor changes to its bid including reducing the quantity of unsold inventory it plans to give out to the lenders, but did not do away with the contentious clauses related to income tax liability and taking approval of YEIDA for any business transfer between YEIDA and JIL.
Following this, although the CoC put the bid on vote starting May 30, it eventually approached the National Company Law Appellate Tribunal (NCLAT) seeking permission to reject the bid, which the Delhi-based appellate tribunal will hear on Monday.
For now, the NBCC’s bid seems unlikely to make it through and relief for the over 20,000 stranded home buyers does not seem coming anytime soon.

Sources: realty.economictimes.indiatimes.com

Jaypee Infratech creditors’ meet on May 30 to discuss NBCC bid

Jaypee Infratech creditors’ meet on May 30 to discuss NBCC bid

May 27, 2019 in Jaiprakash Associates

NEW DELHI: Debt-laden Jaypee Infratech’s financial creditors, which include bankers and homebuyers, will meet on May 30 to discuss state-owned NBCC’s bid to acquire the realty firm and complete stuck housing projects.
A meeting of Committee of Creditors (CoC) has been called on May 30, sources said. As many as 13 banks and 23,000 homebuyers have voting rights in the committee.
Earlier this month, creditors rejected a bid by Mumbai-based Suraksha Realty through a voting process.
Later, the CoC decided to put on vote the NBCC’s offer even as bankers were opposed to this move citing certain conditions in the resolution plan submitted by the public sector firm.
On the bankers’ plea, the National Company Law Appellate Tribunal (NCLAT) had on May 17 annulled voting by homebuyers and lenders on NBCC’s bid and allowed renegotiation on the offer by May 30. Voting process could start from May 31.
At present, bankers and NBCC are negotiating on the latter’s bid to acquire Jaypee Infratech.
Sources had earlier said that NBCC was unlikely to dilute certain conditions, including exemption from future tax liability, mentioned in its bid but the public sector firm was open to negotiating on the offer related to unsold flats.
Lenders have shown reluctance to acquire up to 2,207 unsold flats worth Rs 1,756 crore as proposed by NBCC in its revised offer.
In its latest offer, NBCC has proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.
On this bid, lenders had reservations on certain concessions sought by NBCC and had sought clarifications from the firm.
However, NBCC decided not to dilute the conditions of exemption from future income tax liability as well as from taking consent of development authorities for transfer of businesses, including land parcels and Yamuna Expressway.
Clarifications from the NBCC were sought in the wake of Jaypee Infratech’s Interim Resolution Professional (IRP) Anuj Jain flagging to the lenders that the state-owned firm’s bid was conditional and non-binding.
The IRP had written to the CoC that NBCC’s revised bid was conditional as the plan would not be binding unless key relief measures such as extinguishing of income tax liability and exemption from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer, were taken.
In 2017, Jaypee Infratech went into insolvency process after the National Company Law Tribunal (NCLT) 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, the IRP started the second round of bidding process to revive Jaypee Infratech on the NCLT’s direction.

Sources: realty.economictimes.indiatimes.com

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