NCLAT Upholds Suraksha Realty's Jaypee Infratech Resolution Plan, Orders Additional ₹1,334 Crore Payment To YEIDA
NCLAT Upholds Suraksha Realty's Jaypee Infratech Resolution Plan, Orders Additional ₹1,334 Crore Payment To YEIDA
The National Company Law Appellate Tribunal (NCLAT) upheld Suraksha Realty Limited's resolution plan for Jaypee Infratech Limited (JIL) during its Corporate Insolvency Resolution Process (CIRP).
The NCLAT bench, chaired by Justice Ashok Bhushan and including Technical Member Barun Mitra, ruled that Suraksha Realty must disburse ₹1,334.31 crore to YEIDA within the next four years. This payment aims to facilitate YEIDA in enhancing land compensation for farmers, as per the terms outlined in the concession agreement between Jaypee and YEIDA.
In response to an appeal filed by YEIDA against the NCLT's dismissal of its objections to Suraksha's resolution plan, the order was issued. Jaypee Infratech found itself embroiled in insolvency proceedings following its inability to deliver apartments in a housing project along the Noida-Greater Noida Expressway. Consequently, homebuyers and other financial creditors approached the NCLT to commence insolvency proceedings against Jaypee.
The housing project formed a segment of a broader concession agreement between Jaypee and YEIDA, encompassing the construction of a six-lane expressway and the commercial development of over 6,000 acres of land contiguous to the expressway. Upon Jaypee's insolvency filing, YEIDA submitted claims to the resolution professional. Meanwhile, the Committee of Creditors greenlit Suraksha's resolution blueprint, a decision YEIDA contested unsuccessfully at the NCLT.
YEIDA contended that safeguarding its interests and ensuring that dues were allocated for public objectives were paramount. The NCLAT affirmed YEIDA's status as a secured creditor and underscored that the supplementary compensation to farmers was integral to the initial concession agreement with Jaypee. Therefore, YEIDA was deemed eligible to receive ₹1,689 crore from Suraksha, the triumphant resolution candidate for Jaypee, as extra remuneration for farmers.
The bench held that: “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, i.e., 79% of Rs.1689 crores, which comes to Rs.1334.31 crores. The SRA has already offered to make payment of Rs.1216 crores. Thus, the SRA has to bear additional amount of Rs.118.31 crores.”
The NCLAT annulled the portion of the NCLT's ruling addressing YEIDA's demand for ₹1,689 crore in supplementary compensation for farmers. Nonetheless, the remainder of the NCLT's decision sanctioning Suraksha Realty Limited's resolution proposal was affirmed.
The NCLAT instructed the Successful Resolution Applicant (SRA), Suraksha Realty, to settle 79% of its secured operational debt claim to YEIDA. This sum amounted to ₹1,334.31 crore.
