NCLAT clears Jaypee resolution plan, Suraksha to pay 1.3k cr for farmers – ET Infra


NOIDA: The National Company Law Appellate Tribunal (NCLAT) on Friday approved Suraksha Group’s resolution plan for Jaypee Infratech Ltd (JIL), ordering it to pay Rs 1,335 crore to Yamuna Expressway Industrial Development Authority (YEIDA) over the next four years as farmers’ compensation.

NCLAT set aside an order by the National Company Law Tribunal (NCLT), which had restricted the amount to be paid by Suraksha to just Rs 10 lakh against YEIDA’s claim of Rs 1,689 crore, concluding that the development authority is an operational creditor.

In its Friday order, NCLAT emphasised the need for swift implementation of the modified resolution plan, renewing hope for around 20,000 homebuyers that the flats they booked in Wish Town 15-20 years ago will be completed in the near future.

The order – which brings Suraksha a step closer to taking full control of JIL – follows long-drawn insolvency proceedings, which began in 2017.

“The impugned order passed by the adjudicating authority (NCLT) insofar as it deals with the claim of the appellant of Rs 1,689 crore for additional farmers’ compensation is set aside. The rest of the impugned order approving the resolution plan is upheld. The successful resolution applicant, i.e., respondent No 2 (Suraksha), is directed to make payment to the appellant of its secured operational debt of Rs 1,689 crores in the ratio of 79%, which has been paid to other secured creditors, which amounts to Rs 1334.3 crore,” read the NCLAT order.

YEIDA moved the appellate tribunal after NCLT rejected its claim of Rs 1,689 crore in March last year. Over the next few months, Suraksha and YEIDA made several attempts to reach a settlement, with the company expressing willingness to pay in phases and YEIDA insisting on getting the entire amount at once. Daily hearings at NCLAT began after a wait of nine months on April 18 this year.

According to the resolution plan Suraksha submitted in the bankruptcy court this April, it offered to pay Rs 1,216 crore as enhanced compensation for farmers over the next four years. It proposed to pay 10% of the amount in 90 days, 15% by the end of the first year and 25% annually for the next three years.

NCLAT, however, asked Suraksha to pay an additional Rs 118.3 crore, aligning it with payments made to other secured creditors.

“Let the successful resolution applicant (Suraksha) make the payment of Rs 1,216 crore as per its offer in the timeline as indicated therein. An additional amount of Rs 118.3 crore, which is required to be paid to make its payment equivalent to the payment given to other secured creditors, should also be paid as per the timeline indicated in the offer. Meaning thereby that an amount of Rs 1,334.3 crore is to be paid as per the timeline and ratio indicated in the offer dated April 18, 2024,” the order read.

Ashish M Gupta, president of the JIL Real Estate Allottees Welfare Society, expressed hope that YEIDA would not challenge the order further and slam the brakes on construction again.

“It’s a good judgment. We hope YEIDA will not litigate further. On our submission on construction, NCLAT has directed the implementation and monitoring committee to implement the approved plan as it is binding on all stakeholders. So, we now expect that the IMC (implementation and monitoring committee) will deploy Rs 1,000 crore available with it on construction. Only that will give us some relief,” he added.

There are 16,000 flats in the Wish Town project in Noida and 2,500 in Mirzapur and Agra, where, too, construction has been delayed by more than a decade.

The IMC appointed by NCLT is carrying out work on four Wish Town projects, comprising 62 towers.

However, there are 82 towers across seven projects where construction activities have been stuck for the last 10 years.

  • Published On May 25, 2024 at 08:45 AM IST

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