After Supreme Court's directives, the updated plan sees overwhelming approval with 96.07% CoC voting, ensuring compliance with IBC standards.
In a significant development, the National Company Law Tribunal (NCLT), New Delhi Bench, has approved the revised resolution plan for JNC Constructions Pvt. Ltd. This decision follows a detailed review and compliance with the Supreme Court's directions, ensuring adherence to the Insolvency and Bankruptcy Code (IBC), 2016.
The case, initiated as a Corporate Insolvency Resolution Process (CIRP) on May 30, 2019, saw Mr. Prabhjit Singh Soni acting as the Resolution Professional (RP). The Committee of Creditors (CoC), primarily composed of homebuyers, approved the initial resolution plan submitted by Gautam Builders in consortium with Rapid Contracts Pvt. Ltd. with a 96.07% voting share in March 2020.
However, a Supreme Court judgment on February 12, 2024, in the case of GNIDA v. Prabhjit Singh Soni & Ors., necessitated a review of the plan. The apex court found procedural lapses, including the lack of notice to the Greater Noida Industrial Development Authority (GNIDA) and non-compliance with Section 30(2) of the IBC, which led to the plan being remanded to the CoC for reconsideration.
The revised plan, resubmitted with an Addendum dated April 30, 2024, addressed these issues, particularly revising the treatment of claims by GNIDA and UPAV. The CoC met multiple times to deliberate on the revisions, ultimately approving the addendum with an overwhelming majority.
The NCLT's approval comes with directives for a Monitoring Committee to oversee the implementation of the plan, ensuring quarterly reports to the tribunal as per amended regulations. The tribunal emphasized the limited scope of judicial review in such matters, adhering to the commercial wisdom of the CoC as articulated in landmark judgments by the Supreme Court.
The approval marks a significant step towards the resolution of JNC Constructions' insolvency, promising relief to homebuyers and stakeholders while setting a precedent for adherence to procedural and statutory mandates in insolvency proceedings.
Bottom Line :
Insolvency Resolution - Approval of Resolution Plan by CoC with 96.07% voting - Compliance with Supreme Court directions and provisions of Insolvency and Bankruptcy Code, 2016.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 30(6), 31(1), CIRP Regulations 38(4), Supreme Court judgments in Ghanashyam Mishra and Sons Pvt. Ltd., K. Sashidhar v. Indian Overseas Bank, Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd.
