The Supreme Court on Thursday, 9 August ordered a fresh round of bidding for Jaypee Infratech Ltd.
A three-judge bench headed by Chief Justice Dipak Misra also ordered the reconstitution of the Committee of Creditors according to new amendments to the Insolvency and Bankruptcy Code (IBC) that allow homebuyers to be part of the panel.
Here are the other highlights of the apex court's ruling:
- The 180-day insolvency resolution period to start afresh from today.
- Fresh invitation of bids will include other bidders in addition to the current three.
- Jaiprakash Associates cannot bid for Jaypee Infratech.
- Allows RBI to direct banks to initiate insolvency proceedings against Jaiprakash Associates.
- Rs 750 crore deposited by Jaiprakash Associates for Jaypee Infratech home buyers will be transferred to NCLT and will be subject to further directions of the tribunal.
Committee of Creditors to Include Home buyers
Jaypee Infratech was part of the list of 12 large corporate accounts identified by the banking regulator for immediate insolvency action in June 2017. Lenders led by the IDBI Bank took the case to the National Company Law Tribunal, to be admitted under the insolvency and bankruptcy code.
Since the company was expected to deliver residential apartments to homebuyers in Delhi prior to the insolvency move, the homebuyers approached the apex Court seeking relief.
While the apex court did not stop the insolvency proceedings, it did order that the committee of creditors must have representatives from the homebuyers, so that their interests are taken care of.
According to Supreme Court order on Thursday, Adani Group, Cube Highways and Infrastructure Pvt Ltd and Lakshdeep Investments were the three bidders in the fray, after the committee of creditors opened the case up for bidding. JSW Group, which had submitted its bid had been found ineligible under section 29A of the IBC. Finally, Lakshdeep Investments was chosen as the highest bidder in the case. However, its bid was finally rejected by the committee of creditors, as it did not garner majority votes.
Jaypee Infratech, was thus, thrust into liquidation. Homebuyers once again approached the Supreme Court, to which the apex court ordered that the liquidation proceedings be put on hold till the promoter of the company, Jaiprakash Associates Ltd deposits Rs 2,000 crore as security by 15 June, 2018. The company has deposited Rs 750 crore till now.
(This story was originally published on BloombergQuint.)
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