NCLAT Delhi: Non-Grant Of Reliefs And Concessions By NCLT Does Not Have Any Adverse Effect On The Validity Of The Resolution Plan And Is Not Violative Of The Law
Sachika Vij
8 March 2024 3:00 PM GMT
The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that non-grant of any reliefs and concessions by NCLT does not have any adverse effect on the validity of the Resolution Plan and is not a violation of the law. Background Facts: On 07.02.2003, Yamuna Expressway...
The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that non-grant of any reliefs and concessions by NCLT does not have any adverse effect on the validity of the Resolution Plan and is not a violation of the law.
Background Facts:
On 07.02.2003, Yamuna Expressway Industrial Development Authority and Jaiprakash Associates Limited ('JAL') entered into a Concession Agreement with JAL being granted a concession to develop the expressway against the right to collect toll charges for a period of 36 years and the right to develop 6177 acres at actual compensation cost. Jaypee Infratech Ltd. (Corporate Debtor) was assigned all the rights and obligations under the Agreement.
The consortium of banks provided finances for the project. The Corporate Insolvency Resolution Process ('CIRP') filed by IDBI Bank against the Corporate Debtor was revived by the Supreme Court. Later on, Resolution Plans submitted by Suraksha Realty and NBCC were approved by the Committee of Creditors ('CoC') as well as NCLT New Delhi on 07.03.2023.
JAL and Manoj Gaur (Appellants) erstwhile Managing Director and personal guarantor of Corporate Debtor's loan have filed the appeals against NCLT New Delhi's Order approving the Resolution Plans in the CIRP of the Corporate Debtor.
NCLAT Verdict:
The NCLAT Delhi dismissed the appeals and held that non-grant of any reliefs and concessions by NCLT does not have any adverse effect on the validity of the Resolution Plan and is not a violation of the law.
The Appellate Tribunal observed that the issuance of necessary directions to SEBI, relevant stock exchanges, and the Ministry of Corporate Affairs was requested by the Successful Resolution Applicant ('SRA') to expedite the delisting of shares and take required actions within the legal framework in a time-bound manner as applicable to implement the Resolution Plan.
Consequently, NCLAT deemed the Appellant's objection claiming that NCLT Delhi had exceeded its jurisdiction in granting various reliefs and concessions through directives without merit. The only intention of issuing the directions was to implement the Resolution Plan and is not violative of any statutory provisions. The inclusion of the phrase "as applicable under the prevailing laws" indicated that the SRA sought compliance with the law and not relief or concessions in contravention of any applicable regulations.
The NCLAT also highlighted that the absence of any granted reliefs and concessions does not adversely impact the validity of the Resolution Plan, as explicitly stated in the order by NCLT Delhi, and therefore does not constitute a violation of the law. Additionally, the SRA has not contested the non-approval of any reliefs or concessions.
It emphasized that the SRA is obligated to implement the Resolution Plan, irrespective of whether specific reliefs and concessions are granted or not. It rejected the Appellant's argument that the non-approval of certain reliefs and concessions within the Resolution Plan, the Resolution Plan cannot be approved and should be sent back to the CoC.
The Appellate Tribunal relied on the Supreme Court's decision in Anuj Jain vs Axis Bank Ltd. relating to the question of consideration of 758 acres of land in the Resolution Plan, which became available to the Corporate Debtor following the avoidance application and the Supreme Court's judgment on 26.02.2020. It determined that the judgment in Jaypee Kensington by the Supreme Court indicated that even NBCC's plan sought relief for 858 acres of land.
It observed that both Resolution Applicants were aware of the Supreme Court's order on 26.02.2020, and there was no reason not to include the land made available to the Corporate Debtor after the release of encumbrances. Thus, no merit exists in the Appellant's argument that the 758 acres of land were not included in Suraksha Realty's submitted plan.
In conclusion, NCLAT dismissed the appeals as it found no ground to interfere with NCLT Delhi's decision dated 07.03.2023.
Case Title: Jaiprakash Associates Ltd. vs. Jaypee Infratech Ltd. and Ors.
Case No.: Company Appeal (AT) (Insolvency) No. 548 of 2023 & I.A. No. 2643, 3702 of 2023
Counsel for Appellant: Mr. Krishnan Venugopal, Sr. Advocate with Mr. Anupam Chaudhary, Mr. Sarvesh Mehra, Mr. Krishnan Aggarwal, Mr. Avinash Mathews, Advocates.
Counsel for Respondents: Mr. Sumant Batra, Mr. Sanjay Bhatt, Mr. Sarthak Bhandari, Ms. Mehreen Garg, Advocates for IMC of JIL/R-1. Mr. Krishnendu Datta, Sr. Advocate with Mr. Mahesh Agarwal, Ms. Geetika Sharma, Ms. Eshna Kumar, Mr. Sagar Bansal, Ms. Varsha Himatsingka, Mr. Rajat Sinha, Advocates for SRA, R- 3 & 4. Mr. Tushar Jain, Mr. Vaibhav Chowdhary, Mr. Mukesh Kumar, Advocates in IA 2643/2023. Mr. Parth Tandon and Mr. Harsh Sharma, Advocates for Applicant in I.A. 3218/2023. Mr. Amit K. Mishra, Mr. Akshat Hansaria, Advocates for Homebuyers/Intervenors. Mr. Vierat K. Anand, Ms. Srishty Kaul, Mr. Harish Nadda, Advocates.
