Jaiprakash Associates Limited’s (JAL) lenders Tuesday informed the National Company Law Appellate Tribunal (NCLAT) that the Supreme Court and Reserve Bank had directed the initiation of the insolvency resolution process against the company.
Further, the lenders argued that JAL had a debt and committed default, which warrants its resolution under the Insolvency and Bankruptcy Code, 2016 (IBC).
ICICI bank, one of JAL’s lenders, through its counsel contended that RBI directed the initiation of the insolvency resolution process against JAL as substantial public money was involved and being a regulator, it had a duty to protect the consumer interest.
“RBI in its June 2017 letter identified JAL as an account under which more than 60% of the outstanding amount was NPA,” said the bank’s counsel.
The counsel also reiterated the Chitra Sharma Judgment wherein the Supreme Court pointed out JAL’s financial distress and asked the RBI to resolve JAL’s debt situation.
ICICI Bank’s counsel also pleaded with the tribunal to avoid passing an interim order that would obstruct JAL’s insolvency resolution process.
JAL was admitted into the insolvency process in June after the National Company Law Tribunal (NCLT), Allahabad allowed ICICI bank’s initiation of corporate insolvency resolution process (CIRP) application over JAL’s dues amounting to Rs 1269 crore.
The bank’s counsel argued that JAL’s due of Rs 1269 crore stems from Bucket 2B for which no master restructuring agreement (MRA) was executed, countering JAL’s claim that debt under Bucket 2B was being repaid under MRA.
JAL’s entire debt was divided into three buckets as part of a comprehensive restructuring and reorganisation plan (CRRP), with Bucket 1 having Rs 11,869 crore, Bucket 2A having Rs 6,367 crore and Bucket 2B having around Rs 12,000 crore.
The counsel also told NCLAT that the arrangement under the scheme for settling the Bucket 2B debt has been rejected by the National Company Law Tribunal (NCLT), Allahabad.
