The National Company Law Tribunal (NCLT) on Thursday gave Jaypee Infratech time till August 4 to respond to a petition of insolvency filed by IDBI Bank after the company said it did not receive a notice from the tribunal on beginning the proceedings.
IDBI Bank filed a petition for insolvency against Jaypee Infratech in the NCLT, Allahabad, last month. The company owes IDBI Bank Rs 4,000 crore. Its total dues to all banks are Rs 9,365 crore.
Jaypee Infratech is one of 12 cases the Reserve Bank of India (RBI) has recommended for referral to the NCLT for insolvency proceedings.
If the NCLT admits a petition on insolvency, the board of the company concerned is suspended and an interim resolution professional is given 180 days to turn the company around. If that does not happen even after an extension of 90 days, the company's assets are to be liquidated.
Jaypee Infratech was one of the accounts the RBI recommended for debt restructuring under the Sustainable Structuring of Stressed Assets (S4A) in 2016. Lending banks have ordered a forensic audit to ensure that loans provided to Jaypee Infratech are being used for the purpose they were sought.
Earlier this year, Jaypee Infratech sold its cement and power assets.
The company has not been able to finish a number of real estate projects and buyers of houses in Jaypee Wish Town in Noida have filed an online petition seeking amnesty from the insolvency proceedings.
The petition was filed over fears that if insolvency proceedings began, the first right over the land on which Jaypee Wish Town was being built would go to the Yamuna Expressway Industrial Development Area.