2 July 2019: With creditors rejecting NBCC’s bid to acquire Jaypee Infratech, the NCLAT Tuesday 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 home buyers.
The tribunal was informed 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.
Home buyers have nearly 60 per cent voting right in the CoC.
During the hearing on the matter, the three-member bench headed by Justice Chairman S J 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.
Stressing that the appellate tribunal’s priority is to take care of the interest of the home buyers, the bench asked the representatives of various stakeholders involved to appear before it in the next hearing to find how NBCC’s plans could be altered for the benefit of all, specially the home buyers.
The bench 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.
It asked the banks to nominate a high ranking officer who will negotiate, while asking them to produce a gist of the resolution plan submitted by NBCC and objections they have with regard to the plan.
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.
When the bench was informed that Adani has come offering faster construction for home buyers, the bench said it was not keen on considering it at the current stage, while stating that if the company was an interested party it should “intervene” before the appellate tribunal.
Justice Mukhopadhyaya reiterated that in the interest of home buyers, the resolution of Jaypee Infratech will not be allowed to fail and if it was not possible to find a solution through the NBCC bid, then the bench will consider Adani or any other bids.
As many as 13 banks and over 23,000 home buyers have voting rights in the CoC of Jaypee Infratech. Home buyers 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 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.