On August 9 last year, the top court had ordered re-commencement of the corporate insolvency resolution process against JIL. It had then barred the company, its holding company Jaiprakash Associates (JAL), and the promoters from participating in the fresh bidding process.
The top court had then also allowed Reserve Bank of India to direct banks to initiate insolvency against JAL, and said that there was “no doubt” that both JAL and JIL lacked financial capacity and resources to complete unfinished housing projects.
Hearing another case against JIL, the National Company Law Appellate Tribunal (NCLAT) reserved its order on a plea moved by lenders to JAL seeking to be a part of the committee of creditors (CoC) of JIL.
The lenders, which include Axis Bank, Standard Chartered Bank, and ICICI Bank, contend that they for the loans given to JAL, the company had pledged the land bank which belonged to JIL. It was thus important for them that they be a part of the CoC of JIL so as to have a say in the insolvency process of the company.
In May 2018, the Allahabad bench of National Company Law Tribunal (NCLT) had asked JAL to return nearly 760 acres of land back to its subsidiary JIL. The NCLT had then said that the transfer of land was "fraudulent" and "undervalued", and asked the parent company to release and discharge interest created over the land to lenders including ICICI Bank.
On May 24, the NCLT order was stayed by the appellate tribunal while it heard plea moved by the banks questioning as to who was the rightful owner of the land bank.