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NCLAT Upholds Jaiprakash Associates Insolvency Proceedings

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By Rediff Money Desk, New Delhi   Dec 06, 2024 16:48

The National Company Law Appellate Tribunal (NCLAT) has rejected Jaiprakash Associates Ltd's plea challenging insolvency proceedings initiated against the company. The decision upholds the NCLT's order to initiate Corporate Insolvency Resolution Process (CIRP) against the company.
NCLAT Upholds Jaiprakash Associates Insolvency Proceedings
Illustration: Dominic Xavier/Rediff.com
New Delhi, Dec 6 (PTI) The National Company Law Appellate Tribunal (NCLAT) on Friday rejected Jaiprakash Associates Ltd's petition challenging the insolvency proceedings initiated against the company.

A three-member bench led by Chairperson Justice Ashok Bhushan has upheld the orders passed by the National Company Law Tribunal (NCLT), which had directed to initiate Corporate Insolvency Resolution Process (CIRP) against the company.

The appellate tribunal said "after answering all the issues, we are of the view that no grounds have been made out to interfere in order of NCLT".

The order has been pronounced orally and a detailed order is yet to be uploaded.

On June 3 this year, the Allahabad bench of NCLT admitted the six-year-old insolvency petition filed by ICICI Bank in September 2018 and appointed Bhuvan Madan as interim resolution professional, suspending the board of JAL.

ICICI Bank had filed an insolvency petition against JAL under section 7 of IBC, claiming a default of more than Rs 16,000 crore.

Besides, the country's biggest lender SBI had also moved NCLT against JAL, claiming a total default of Rs 6,893.15 crore as of September 15, 2022.

JAL, the flagship firm of the debt-ridden Jaypee Group, was part of the Reserve Bank of India's list of 26 big loan defaulters to commercial banks for initiating bankruptcy proceedings in August 2017.

This NCLT order was challenged before the appellate tribunal NCLAT by Sunil Kumar Sharma, a member of the suspended board of JAL.

On June 11, a vacation bench of NCLAT had asked the consortium of lenders to consider the modified one-time settlement (OTS) submitted by JAL, in which the debt-ridden group has increased the upfront payment and sales of cement assets.

However, on July 3 the consortium of JAL lenders led by ICICI Bank rejected the modified OTS proposal.

Earlier, JAL had moved an OTS proposal to creditors before the NCLT, which had a provision of an upfront payment of Rs 200 crore and the balance of about Rs 16,000 crore to be paid on or before 18 weeks from its acceptance.

However, this was dismissed by the Allahabad bench of the NCLT which ordered initiating the insolvency process against JAL.

In its modified OTS, JAL has increased the upfront payment to Rs 500 crore. It had proposed an additional deposit of Rs 300 crore besides the Rs 200 crore already furnished.
Source: PTI
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