The Insolvency and Bankruptcy Board of India and the insolvency resolution professional for Jaypee Infratech Limited (JIL) urged the Supreme Court on Wednesday to revive corporate insolvency resolution process for the debt-ridden company and constitute a fresh committee of creditors in the light of the peculiar facts of the case.
Additional Solicitor General Tushar Mehta, who appeared for the Insolvency Board, submitted that the case involved “genuine interests” of homebuyers and must be decided by the National Company Law Tribunal (NCLT) as per the statutory framework.
Mehta reiterated that according to the new amendment to the insolvency code, homebuyers qualified as financial creditors and could be part of the committee of creditors for evaluation of the submitted resolution plans.
Liquidation of the debt-ridden company would not help any stakeholders, especially the homebuyers, said Parag Tripathi, appearing for the resolution professional.
Stressing the interests of the overwhelming number of homebuyers who either wanted a refund or delivery of flats, Tripathi urged the apex court to avert the liquidation of JIL even after the expiry of the statutory deadline for its corporate insolvency resolution process.
He suggested that a committee must be constituted “to work out” which resolution applicant had the capacity to pay the debt.
The court was also informed that none of the resolution plans that were submitted to the resolution professional had any provision or safeguards for the homebuyers.
Lakshdeep Investments and Finance Ltd and Cube-Kotak consortium, the two resolution applicants for JIL, argued for re-consideration of their bids by a newly constituted committee.
Cube Highways and Transport Assets Advisors Private Limited also stated that it was willing to make an upfront payment of Rs 3,300 crore and give a bank guarantee of Rs 100 crore for JIL’s 65 km Yamuna Expressway road assets and can deposit the money in a month.
JIL features in Reserve Bank of India’s first list of non-performing asset (NPA) accounts and has debt exposure of over Rs 9,783 crore in September 2017. IDBI Bank’s insolvency plea against JIL was admitted by NCLT in August 2017.
The corporate insolvency resolution period for JIL expired in May this year.
The parent company, Jaiprakash Associates Limited owes more than ₹29,000 crore to various banks.
The two debt-ridden companies are also embroiled in a litigation with several homebuyers over delay in completion of its housing projects.
The matter would be next heard on Thursday.
Source: LiveMint, July 19, 2018