NCLAT rejects YEIDA plea; upholds Jaypee Infratech resolution plan
The National Company Law Appellate Tribunal (NCALT) has paved the way for Suraksha Realty to implement its resolution plan for corporate debtor Jaypee Infratech. The appellate tribunal in an order passed on 24 May 2024 dismissed an appeal filed by Yamuna Expressway Industrial Development Authority (YEIDA) against the resolution plan. The NCLAT rejected YIEDA’s plea that Suraksha Realty should have paid it Rs 1,689 crore (as additional compensation to farmers), arguing that the appellant being a ‘Secured’ operational creditor must receive only 79% of the admitted claims as was the case for secured financial creditors.
Therefore, the NCLAT contended that YEIDA should receive Rs.1334.31 crore as part of the resolution amount instead of the Rs 1,689 crore as claimed by it. And since Suraksha Realty had already made a payment of Rs 1,216 crore, the NCLAT ordered it to make the additional Rs 118.31 crore to YEIDA.
“We have already held Appellant as secured Operational Creditor with respect to additional farmers’ compensation of Rs.1689 crores. The Financial Creditors under Resolution Plan have been proposed the payment of 79% of their secured dues. The Appellant, who is also a secured Operational Creditor to the extent of Rs.1689 crores, is also entitled for payment of same percentage of amount, which has been offered to the Financial Creditors. We, thus, are of the view that towards additional farmers’ compensation, the Appellant is entitled for 79% of its claim — 79% of Rs.1689 crores, which comes to Rs.1334.31 crores,” the NCLAT said in its order.
The Resolution Plan of Suraksha was approved by CoC in June 2021 with 98.66% votes. The resolution plan among others includes capital infusion and debt repayment of over Rs 12,000 crore and completion of real estate projects of corporate debtor Jaypee Infratech.
Jaypee Infratech was one of the first set of large NPA cases that were sent for resolution under the newly implemented Insolvency and Bankruptcy Code in 2017. While most other cases got resolved within a couple of years, Jaypee Infratech remained unresolved for over five years.
Also See: Details of approved resolution plan for Jaypee Infratech
