28 March 2019: In keeping with the appellate tribunal’s latest directions, the National Company Law Tribunal (NCLT) approved an amended version of the sole resolution plan for Jyoti Structures.
The two-member Mumbai bench of the tribunal, led by Justice VP Singh and Ravikumar Duraisamy said, “The National Company Law Appellate Tribunal has already held the resolution under Section 30 (2)… and further directed to NCLT to approve the plan in section 31 of IBC with one modification that is to implement the resolution plan in 12 years. Therefore, we hereby approve the resolution plan.”
As per instructions of the NCLAT, the resolution plan presented by a consortium led by Sharad Sanghi, MD and CEO of Netmagic Solutions, also the sole bidder for the debt-laden company, was admitted by the NCLT on Tuesday with a slight amendment. In a change from the earlier plan that was denied by the NCLT back in July last year, Sanghi has offered to pay Rs 3,965 crore in 12 years against 15 years stated earlier.
Jyoti Structures, with a total outstanding debt exceeding Rs 7,000 crore, is one of 12 stressed companies identified by the RBI for insolvency proceedings in June last year.
On August 20, 2018, the NCLAT ordered the Mumbai bench of the NCLT not to pass any order for liquidation of Jyoti Structures. It also asked the resolution professional not to sell any movable or immovable property of the company. Though the NCLT Mumbai did not order liquidation, it had rejected Sanghi’s application through an order pronounced on July 25. The 270-day period for the resolution process for Jyoti Structures came to an end on March 31, 2018.
Meanwhile, DBS Bank, one of the secured financial creditors, in its capacity as the “first sole exclusive charge” and a 0.73% voting share in the consortium, placed on record its opposition and pled for a stay, which was rejected by the NCLT.