August 23, 2019

SC extends status quo on Jaypee insolvency resolution

[ by Legal Era News Network ]


The Supreme Court on Thursday extended by a week the status quo on the insolvency process on Jaypee Group's plea against the National Company Law Appellate Tribunal's (NCLAT) order.

A bench of Justices A. M. Khanwilkar and Dinesh Maheshwari gave the order after they were informed by Jaypee Group's lawyer and senior advocate Fali S. Nariman that a batch of 18-19 petitions have been filed challenging the new amendments to the Insolvency and Bankruptcy Code (IBC), which is being heard by a different bench.

Additional Solicitor General Madhavi Divan, who is assisting the court on behalf of the Centre in the case, informed the bench that she was arguing a part-heard case in another court.

Thereafter the top court posted the matter for further hearing on August 29.

On August 2, the Supreme Court ordered status quo for two weeks on Jaypee Group's plea against NCLAT's order after it was informed that Parliament had passed the proposed amendments in the Insolvency and Bankruptcy Code.

Jaypee Group has moved the Supreme Court against the NCLAT order which barred Jaypee Associates Ltd, the parent company, from bidding for Jaypee Infratech Ltd (JIL).

On July 30, the NCLAT extended the resolution process of JIL by 90 days, thereby allowing submission of fresh bids for the bankrupt realty company.

The tribunal said the process of bidding and approval of a resolution plan by the committee of creditors (CoC) should conclude in 45 days.

The 90-day extension comes amid the lenders' request to exclude around 250 days, from September 17, 2018 to June 4, 2019, from the stipulated period for corporate insolvency resolution process, as during this period no bid could be voted upon in view of the confusion regarding the voting rights of the homebuyers.

Under the Insolvency and Bankruptcy Code (IBC), the resolution process of a company is mandated to be concluded within 270 days, failing which the company has to go for liquidation. The 270-day deadline for Jaypee Infratech ended on May 6.

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