Jaypee Infratech: NCLAT gives conditional nod to NBCC to execute resolution plan

• The NCLAT allowed the IRP to proceed with the constitution of the interim monitoring committee for the execution of the plan

• The NCLAT also issued notices to ICICI Bank, IDBI Bank and others, asking them to file a reply in two weeks

New Delhi: The NCLAT (National Company Law Appellate Tribunal) refused to stay the execution of the resolution plan submitted by state-run NBCC for the acquisition of Jaypee Infratech on Wednesday. It also allowed the IRP (interim resolution professional) to proceed with the constitution of the interim monitoring committee for the execution of the plan. The committee will comprise of representatives of NBCC and members of the Committee of Creditors — IDBI Bank, IIFCL and LIC.

"Meanwhile, till further orders, the approved resolution plan may be implemented subject to outcome of this appeal…The IRP may constitute an interim monitoring committee comprising the successful resolution applicant, i.e., the appellant and the three major institutional financial creditors, who were Members of the 'committee of creditors,'" NCLAT said in response to an urgent petition moved by NBCC.

NBCC Jaypee Infratech acquisition: NCLAT says next hearing will be on May 15

The NCLAT also issued notices to ICICI Bank, IDBI Bank and others, asking them to file a reply in two weeks and listed the matter for next hearing on May 15. A five-member interim monitoring committee has been constituted to oversee the implementation of the resolution plan by NBCC.

Sources said that although no construction can begin immediately because of the Coronavirus lockdown, the interim arrangement will at least set the ball rolling. "The process of transition can now begin. There will finally be some movement going forward. The interim monitoring committee may now decide to draw up a strategy for seeking approvals required under the resolution plan from various authorities, it may decide to renegotiate certain contracts and even revisit some of the timelines," legal experts said.

According to the Resolution Plan submitted by NBCC in December 2019: "On and from the approval date, the Company (Jaypee Infratech) will be managed and controlled by the Monitoring Agency/any other person appointed by the NBCC in consultation with the Steering Committee comprising of representatives of three Institutional Financial Creditors having the largest voting share in the admitted financial debt, on the basis of a letter of appointment/agreement."