The National Company Law Appellate Tribunal (NCLAT) on Thursday admitted Jaiprakash Associates’ (JAL) plea challenging the Allahabad National Company Law Tribunal’s (NCLT) May 16 order that directed it to transfer 760 acre of mortgaged land back to its subsidiary firm Jaiprakash Infratech (JIL). It has listed the matter for further hearing on July 13 and issued notices to the resolution professional (RP) Anuj Jain. The NCLAT on May 24 had stayed the NCLT’s order on the plea of JAL’s lenders — Axis Bank, Standard Chartered Bank and ICICI Bank — and fixed July 13 as the next date of hearing. So effectively the petition of the lenders and JAL will not be clubbed by the NCLAT for hearing. The stay order
Staying the NCLT’s order that had asked JAL to reverse the land to JIL as it it had found it to be “fraudulent, preferential and undervalued”, the NCLAT had observed that the NCLT did not have the jurisdiction to declare any instrument illegal as this power was vested with civil courts. However, the appellate tribunal has directed that the corporate insolvency resolution process against JIL would continue during the pendency of the appeals.
The RP had alleged that the land, valued around Rs 5,000-6,000 crore, was mortgaged to secure loans taken by JAL from State Bank of India, ICICI Bank, IDBI Bank and Standard Chartered Bank. The transfer took place at the time when the banks started classifying JIL as a non-performing asset due to loan defaults. The RP’s contention was that the land could have been sold or mortgaged by JIL to raise funds and complete the construction of flats. The company was required to deliver around 33,000 flats of which more than 25,000 are yet to be completed.