NCLAT clarifies contentious issues on Jaypee Infratech resolution order

The National Company Law Appellate Tribunal (NCLAT) gave its observation on two petitions filed against an NCLT order dated 07th March 2023, whereby the adjudicating authority approved the resolution plan by submitted by Suraksha Realty and Lakshdeep Investments and Finance Private Limited for Jaypree Infratech.

The petitions were by Jaypee Associate Ltd and Jaypee Infratech Ltd. The bone of contention between the parties relates to claims of both the parties which has not been accepted by the Adjudicating Authority in the said Order. The NCLAT addressed eight key questions:

What is the ambit and scope of reconciliation of accounts between JAL & JIL as per directions of the Supreme Court in Jaypee Kensington Judgment?

NCLAT observation: Ambit and scope of reconciliation of account between JAL and JIL was concerning the amounts advanced to JAL by JIL towards construction contracts and extent of liabilities discharged by JAL towards above. The reconciliation was not to find out what amount was payable to JAL by Jaypee Infratech.

Whether the claim of Rs 212 crore relating to Bank Guarantees issued by JAL invoked by the Lenders of JIL is the amount which need to be adjusted/deducted from the amount payable to JIL?

NCLAT Observation: The claim of Rs.212 crores relating to Bank Guarantees issued by JAL invoked by the lenders of JIL need not to be adjusted/deducted from the amount payable to JIL.

Whether RA Bill for construction amounting to Rs 49.63 crore payable by JIL to JAL should have been deducted from amount payable to JIL?

NCLAT Observation: RA Bill for construction amounting to Rs.49.63 Crores payable by JIL to JAL could not be deducted from amount payable to JIL.

Whether the Facility Management Bills raised by JAL on JIL of Rs.2.33 crore ought to have been deducted from the amount to be paid to JIL?

NCLAT observation: The Facility Management Bills raised by JAL on JIL of Rs.2.33 Crores could not be deducted from the amount to be paid to JIL.

Whether amount of Rs 1.19 Crore towards providing Hospitality Services ought to have been deducted from the amount payable to JIL?

NCLAT observation: Amount of Rs.1.19 Crores towards providing Hospitality Services could not be deducted from the amount payable to JIL.

Whether the Adjudicating Authority on account of mutually settled amount totalling to Rs 12.26 crore ought not to have added amount of Rs 6.13 Crore in the amount receivable by JIL?

NCLAT observation: Adjudicating Authority on account of mutually settled amount totalling to Rs.12.26 Crores has not committed any error in adding amount of Rs.6.13 Crores in the amount receivable by JIL

Whether direction of the Adjudicating Authority in paragraph 111 directing for payment to JIL/Home-Buyers of JIL of Rs 649.52 Crore with proportionate interest is unsustainable?

NCALT observation: The direction of the Adjudicating Authority for payment to JIL/Home-Buyers of JIL of Rs.649.52 Crores with proportionate interest is unsustainable.

Whether JIL is entitled for amount of Rs 70.89 Crore towards Land Swap Deal and the Adjudicating Authority has wrongly rejected the said claim?

NCLAT Observation: JIL is not entitled for amount of Rs.70.89 Crores towards Land Swap Deal and the Adjudicating Authority has rightly rejected the said claim.

Also Read: Details of approved resolution plan for Jaypee Infratech