JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION & ORS. v. NBCC (INDIA) LTD. & ORS.

A (ii) Adequate provision is required to be made in the resolution plan as regards utilisation of the land bank of 758 acres, that has become available to JIL free from encumbrance, in terms of the judgment dated 26.02.2020 of this Court in the case of Anuj Jain (supra). B L. (i) The impugned order dated 03.03.2020 shall be read as modified in relation to Clause 7 of Schedule 3 of the resolution plan; and the said clause shall stand approved. (ii) As regards possession/control over the project sites/ lands of JIL, it is left open for the resolution applicant to take recourse to the appropriate proceedings in accordance with law, whenever occasion so arise. M. The Appellate Authority was not justified in providing for an Interim Monitoring Committee for implementation of the resolution plan in question during the pendency of appeals. The impugned order dated 22.04.2020 passed by NCLAT is set aside.

217Copy pinpoint217. The net result of the discussion and findings hitherto is that some of the terms and stipulations of the resolution plan of NBCC, which was voted for approval by 97.36% of the voting share of the Committee of Creditors, do not meet with approval. Although, barring such terms and stipulations, all other terms and propositions of the resolution plan stand approved. To be specific, the terms and stipulations in the resolution plan which do not meet with approval are those concerning: (a) the land providing agency [as held in Point C (supra)]; (b) the dissenting financial creditor [as held in Point D (supra)]; (c) the undischarged security interest of the lender of JAL [as held in Point K (i) (supra)]. F 217.1. Apart from the above, we have also disapproved the decision of the Adjudicating Authority in relation to the said amount of INR 750 crores with accrued interest and have held that this amount is the property of JAL and the stipulations in the resolution plan concerning its usage by JIL or the resolution applicant cannot be approved [as held in Point J (i) (supra)]. However, the final treatment of the said amount of INR 750 crores with accrued interest shall be determined by NCLT after the reconciliation of accounts between JAL and JIL and in terms of the directions contained in this judgment. 217.2.The added feature of the matter is that adequate provision is required to be made by the resolution applicant for utilisation of the

JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE 897 ASSOCIATION v. NBCC (INDIA) LTD. [DINESH MAHESHWARI, J.]

land bank of 758 acres on which, security interest of the lenders of JAL A stands discharged in terms of the judgment of this Court in Anuj Jain (supra). 217.3.The matters aforesaid, one way or the other, relate to the commercial terms of the resolution plan and carry their own financial implications. B

218Copy pinpoint218. For what we have held hereinabove, when several shortcomings are found in the resolution plan approved by the Committee of Creditors vis-à-vis the specified parameters, the plan cannot be approved and the matter is required to be sent back to the Committee of Creditors. But the course to be adopted in the present matter carries its C own share of complications.

219Copy pinpoint219. We have anxiously pondered over all the peculiarities and complications involved in this matter where twice over in the past, this Court had to invoke its plenary powers under Article 142 of the Constitution of India, so that the insolvency resolution process concerning D JIL could be taken to its logical fruition but within the discipline of IBC. Having regard to the circumstances, this Court had provided windows for completion of CIRP while essentially discounting on the time spent in the course of litigations.

220Copy pinpoint220. As noticed, in the judgment dated 09.08.2018 in Chitra E Sharma (supra), this Court revived the CIRP after taking note of the peculiarities of the case and later amendment to IBC whereby, the doubts about the status of homebuyers were removed and they were duly accorded the recognition as financial creditors. Then, in the judgment dated 06.11.2019 in Jaiprakash Associates Ltd. (supra), this Court provided another period of 90 days for completion of the CIRP from the date of judgment, after observing that delay in completion of CIRP was attributable to the process of law and neither the homebuyers nor any other financial creditor was to be blamed for pendency of the proceedings. This Court also observed that extraordinary situation had arisen because of constant experimentation at different levels due to lack of clarity on the matters crucial to the decision making process of CoC and besides, there had been further legislative changes whereby, the scope of resolution plan was expanded. This Court also took note of the fact that there was unanimity amongst all the parties appearing before the Court that liquidation of JIL must be eschewed and an attempt be made to salvage the situation by finding out some viable arrangement which could H

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A subserve the interests of all concerned. The Court further took into account the third proviso to Section 12(3) of the Code whereby, another period of 90 days was provided in relation to the pending insolvency resolution process. All these factors led this Court to issue directions under Article 142 of the Constitution of India for the second time in this matter, to do substantial and complete justice to the parties and in the interest of all the stakeholders.

221Copy pinpoint221. Taking up the present position, it appears that the resolution applicant, as also a large number of homebuyers of JIL having substantial voting share in CoC, carried a misplaced notion that the said amount of INR 750 crores and accrued interest has become an asset of JIL. At the same time, it appears that there had been lack of clarity as regards the treatment of contingent liability of the additional amount of compensation. The lack of clarity percolated in the decision of the Adjudicating Authority too, where it was assumed by the Adjudicating Authority that some of the questionable terms/stipulations of the resolution plan could be modified/ D modulated by it. 221.1. The consequence and impact of the judgment of this Court in Anuj Jain (supra) dated 26.02.2020 was also not properly taken in comprehension by the Adjudicating Authority and, as noticed, it was assumed by the Adjudicating Authority in its order dated 03.03.2020 that E the entire ‘858’ acres of land stood discharged from the burden of security. Although the so-called correction of errors was carried out by the Adjudicating Authority on 17.03.2020 and the figure was corrected to ‘758’ acres but the consequences of such a material correction were not examined.

F 221.2. Nevertheless, it gets reiterated that encumbrance over 758 acres of land (which is said to be carrying a valuation of over INR 5000 crores) is removed; and availability of the said land parcel has a substantial impact on the position of assets and liquidity of the corporate debtor JIL.

222Copy pinpoint222. For all the features we have noticed hereinabove, it is at G once clear that the entire substratum of the corporate insolvency resolution concerning JIL has undergone a sea of change. The added features in the continuing processes had been that JAL asserts to have carried out several works to reduce its liability towards JIL and on the other hand, IRP has asserted to have carried out further construction works and having made Offers of Possession to several homebuyers. H

JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE 899 ASSOCIATION v. NBCC (INDIA) LTD. [DINESH MAHESHWARI, J.]

223Copy pinpoint223. Taking all the facts and circumstances into account and in keeping with the spirit and purport of the orders passed in the past, we are inclined to again exercise the powers under Article 142 of the Constitution of India and to enlarge the time for completion of CIRP concerning JIL while extending opportunity to the said resolution applicants Suraksha Realty and NBCC to submit modified/fresh resolution plans, which are compliant with the requirements of the Code and the CIRP Regulations and are in accord with the observations and findings in this judgment. 223.1. We are conscious of the requirements of the discipline of IBC and would hasten to observe that the course which is being adopted is in the complex and peculiar features of this case but, this repeat exercise concerning the CIRP of JIL cannot be an unending process and needs to be taken to its logical conclusion. As regards the time frame, we are inclined to proceed on the theme and spirit of the judgment dated 06.11.2019 wherein, first 45 days were allowed for invitation of resolution plan and consideration by CoC. The later part of the extended time was provided for removing any difficulty and for passing appropriate orders by the Adjudicating Authority. 223.2. Having regard to the circumstances, we deem it just and proper to provide further time of 45 days from the date of this judgment for submission of the modified/fresh resolution plans by the resolution applicants, for their consideration by CoC and for submission of report by IRP to the Adjudicating Authority. This extended time includes the reconciliation of accounts of JIL and JAL referred to in Point J. The process of reconciliation of accounts may go on alongside the processing of the resolution plans. F

224Copy pinpoint224. We also deem it appropriate to clarify that the processing of the modified/fresh resolution plans, as permitted and envisaged by this judgment, is required to be completed within the extended time and for that matter, the other aspects like reconciliation of accounts between JAL and JIL or resolution of the issues related with the financial creditor of the subsidiary of the corporate debtor shall be the matters to be dealt G with separately and decision on the resolution plan by the Committee of Creditors need not wait the resolution of those issues. 92 92 In the passing, we may also observe that intrinsically interwoven transactions between JAL and JIL cover another aspect of arrangements whereby certain land parcels were transferred from JIL to JAL. The resolution plan in question, in clause 19 of Schedule H

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225Copy pinpoint225. Accordingly, while once again exercising our powers under Article 142 of the Constitution of India to do substantial and complete justice to the parties and in the interest of all the stakeholders of JIL, we conclude on these matters with the following order: 225.1. The matter regarding approval of the resolution plan stands B remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment. 225.2. We direct the IRP to complete the CIRP within the extended time of 45 days from today. For this purpose, it will be open to the C IRP to invite modified/fresh resolution plans only from Suraksha Realty and NBCC93 respectively, giving them time to submit the same within 2 weeks from the date of this judgment. 225.3. It is made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to D issue any new information memorandum. The said resolution applicants shall be expected to proceed on the basis of the information memorandum already issued by IRP and shall also take into account the facts noticed and findings recorded in this judgment.

E 225.4. After receiving the resolution plans as aforementioned, the IRP shall take all further steps in the manner that the processes of voting by the Committee of Creditors and his submission of report to the Adjudicating Authority (NCLT) are accomplished in all respects within the extended period of 45 days from the date of this judgment. The Adjudicating Authority shall take final decision in terms of Section 31 of the Code expeditiously upon submission of report by the IRP. 3, provided for termination of such arrangements where title and ownership was lying with the corporate debtor JIL. The Adjudicating Authority approved the said proposition while observing that the resolution applicant would be at liberty to proceed in accordance with law. The erstwhile director of the corporate debtor has raised questions over this arrangement in his written submissions while submitting that such terminations may create unprecedented crises and would cause prejudice to JAL’s homebuyers. We have not commented on this aspect in the judgment essentially for the reason that the same did not form the core of the principal issues involved in this matter. However, when the matter is to be reconsidered, all the relevant aspects are left open for consideration of the Committee of Creditors. 93 Only these resolution applicants were permitted to submit the revised plans in the judgment dated 06.11.2019.

JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE 901 ASSOCIATION v. NBCC (INDIA) LTD. [DINESH MAHESHWARI, J.]

225.5. These directions, particularly for enlargement of time to complete the process of CIRP, are being issued in exceptional circumstances of the present case and shall not be treated as a precedent. 225.6. As noticed in paragraphs 4.5 and 38.3 hereinabove, the proceedings relating to CIRP of JIL were initiated by the Allahabad B Bench of National Company Law Tribunal but, later on, the same were transferred to its Principal Bench at New Delhi. Therefore, the proceedings contemplated by this judgment shall be taken up by the Principal Bench of the National Company Law Tribunal at New Delhi. C

226Copy pinpoint226. All the appeals, transferred cases, transfer petitions and interlocutory applications in this batch stand disposed of.

227Copy pinpoint227. A copy of this order be forwarded to the NCLT, New Delhi and IRP through email forthwith for compliance. Acknowledgement D

228Copy pinpoint228. While closing, we owe a duty to put on record our thanks and compliments to the learned counsel for the respective parties, their associates and their research assistants who all, despite challenging circumstances due to the pandemic and virtual hearing, have rendered invaluable assistance to the Court in dealing with vast variety of questions E involved in these matters, by way of neatly articulated oral submissions as also meticulously drawn written submissions. Table of Contents

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H Bibhuti Bhushan Bose Matters disposed of.