The National Company Law Appellate Tribunal (NCLAT) has upheld the decision of the National Company Law Tribunal (NCLT) to approve Suraksha Realty's bid to acquire the debt-ridden Jaypee Infratech Ltd (JIL). While the NCLT's decision in March 2023 provided relief to over 20,000 home buyers, the NCLAT has now directed Suraksha Realty to pay an additional around INR 1,300 crore as compensation to farmers. The NCLAT's decision aims to balance the interests of all stakeholders, including home buyers and the Yamuna Express development authority's (YEIDA) claim for additional farmer compensation. The NCLAT has set aside the NCLT's decision on the YEIDA's claim, but upheld the rest of the order approving the resolution plan, paving the way for its swift implementation.
The National Company Law Appellate Tribunal (NCLAT) has upheld the decision of the National Company Law Tribunal (NCLT) to approve Suraksha Realty's bid to acquire the debt-ridden Jaypee Infratech Ltd (JIL). However, the NCLAT has directed Suraksha Realty to pay an additional around INR 1,300 crore as compensation to farmers.
The NCLAT's decision, which upholds the NCLT's decision of March 2023, aims to avoid further delays in the implementation of the resolution plan and to protect the interests of all stakeholders, including home buyers and the claim of the Yamuna Express development authority (YEIDA) for additional compensation of the farmers.
The NCLT had, on March 7, 2023, approved the bid of the Mumbai-based Suraksha group to acquire JIL, providing relief to more than 20,000 home buyers whose investments are stuck across various projects being developed in the Delhi-NCR region.
The NCLAT has set aside the NCLT's decision regarding the YEIDA's claim of INR 1,689 crore for additional farmers' compensation. However, the NCLAT has upheld the rest of the order approving the resolution plan.
The NCLAT has directed Suraksha Realty, the successful resolution applicant, to pay INR 1,334.31 crore to the YEIDA, which is 79% of the total claim of INR 1,689 crore. Suraksha Realty had earlier undertaken to pay INR 1,216 crore towards additional compensation, and the NCLAT has directed the company to make the payment as per the timeline indicated in its offer.
The corporate Insolvency Resolution Process (CIRP) against JIL was initiated in August 2017 on an application by an IDBI Bank-led consortium. In its final resolution plan, the Suraksha group offered to bankers more than 2,500 acres of land and nearly INR 1,300 crore by way of issuing non-convertible debentures, and also proposed to complete all pending flats over the next four years. JIL's lenders had submitted a claim of INR 9,783 crore.
The NCLAT's balanced approach, upholding the core of the resolution plan while addressing the legitimate concerns of the YEIDA, demonstrates its commitment to finding a fair and equitable solution for all stakeholders involved in the JIL insolvency case. This decision is expected to provide much-needed relief to the home buyers and pave the way for the completion of the pending projects, while also ensuring that the farmers' interests are adequately represented and compensated.
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