The National Company Law Appellate Tribunal (NCLAT) on May 24 upheld the resolution plan submitted by Suraksha Realty Limited for Jaypee Infratech Limited as part of the latter’s Corporate Insolvency Resolution Process (CIRP). [Yamuna Expressway Industrial Development Authority v. Monitoring Committee of Japyee Infratech]
A coram of Chairperson Justice Ashok Bhushan and technical member Barun Mitra directed Suraksha to pay ₹1,334.31 crore to Yamuna Expressway Industrial Development Authority (YEIDA) over the next four years so that the authority can hike land compensation to farmers.
The appellate tribunal observed that ordering so would pave the way for implementing the resolution plan.
“To put finality to the process and by accepting YEIDA’s claim ends of justice will be served in paving a way forward for implementation of the Resolution Plan. By issuing direction to Jaypee to make payment of 79% of secured claim of the Appellant of ₹1689 crores (₹1334.31 crores) shall make Suraksha’s Resolution Plan compliant deserving approval,” NCLAT held.
The order was passed in an appeal by YEIDA against the rejection of its objection to Suraksha’s resolution plan approved by the National Company Law Tribunal at Allahabad.
Jaypee was admitted into insolvency proceedings after it failed to deliver apartments in a housing project along the Noida-Greater Noida Expressway. The homebuyers and other financial creditors approached the NCLT at Allahabad for initiating insolvency against Jaypee.
The housing project was a result of the concession agreement between Jaypee and YEIDA to construct a six-lane expressway and commercially exploit over 6,000 acres of land abutting the expressway.
When Jaypee was admitted for insolvency, YEIDA raised claims before the resolution professional. Meanwhile the Committee of Creditors approved a resolution plan submitted by Suraksha. When YEIDA’s objections were rejected by NCLT, it approached NCLAT.
YEIDA sought protection of its own interest for dues which were to be utilised for public cause.
The NCLAT reasoned that YEIDA was a secured creditor; and that additional compensation payable to the farmers was a part of the concession agreement between Jaypee and YEIDA. Hence, YEIDA was entitled to receive ₹1,689 crore from Jaypee’s successful resolution applicant, Suraksha, as the additional compensation for farmers.
“We have already held YEIDA as secured operational creditor with respect to additional farmers’ compensation of ₹1689 crores. The Financial Creditors under Resolution Plan have been proposed the payment of 79% of their secured dues. We, thus, are of the view that towards additional farmers’ compensation, the Appellant is entitled for 79% of its claim which comes to ₹1334.31 crores. Jaypee has already offered to make payment of ₹1216 crores. Thus, it has to bear additional amount of ₹118.31 crores,” the appellate tribunal’s order read.
Additional Solicitor General N Venkataraman, Senior Advocate Gopal Jain and Advocates Amar Gupta, Aniket Aggarwal, Divyam Aggarwal, Mohit Sharma and Rijul Uppal appeared for YEIDA.
Advocates Sumant Batra, Sanjay Bhatt, Nidhi Yadav, Apoorva Chowdhury and Sarthak Bhandari appeared for Jaypee’s monitoring committee.
Senior Advocates Mukul Rohatgi, Krishnendu Datta, Rajshekhar Rao, P Nagesh with Advocates Mahesh Agarwal, Geetika Sharma, Sagar Bansal, Eshna Kumar, Akshay Sharma, Shivam Shorewala, Srishti Kaul, Harish Nadda, Vikalp Singh, Kumar Shashank, Rishab Singh, Shashank Shekhar Shukla, Deepanwita Chakraborty, Arun Yadav, Anant Singh and Abhishek Sharma appeared for Suraksha Realty.
Advocates Akshat Hansaria, Amit Kumar Mishra, Mitaksara Goyal, Shivam Singh, Gaurav Mitra, Ishan Roy Choudhary and Chitranshul Sinha appeared for the homebuyers.
Senior Advocate M Krishnan Venugopal with Advocates Anupam Choudhary, Sarvesh Mehra, Avinash Mathews and Krishan Agarawal, briefed by Sai Prakash Associates, appeared for intervenors.
Senior Advocate S Niranjan Reddy with Advocates Raunak Dhillon, Aishwarya Gupta, Ashutosh Singh and Nityesh Dadhich appeared for National Asset Reconstruction Company Ltd (NARCL).
Advocates Abhishek Verma, Anant Singh, Arun Yadav, Sumesh Dhawan, Shaurya Shyam, Vatsala Kak and Parul Sharma appeared for other intervenors.
[Read order]