Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) has reserved its order on both the plan placed before it by the resolution professional of Jyoti Structures Ltd and DBS Bank’s plea seeking that the resolution plan be rejected.
On Thursday, Prateek Seksaria, the advocate representing DBS Bank, argued that the eight-day extension after the admission of the case by NCLT and the resolution professional taking over the affairs of the company should not be considered under the Insolvency and Bankruptcy Code (IBC).
The beleaguered engineering, procurement and construction firm owes around ₹ 8,000 crore to a consortium of lenders and was on the first list of the 12 large accounts referred by the Reserve Bank of India for resolution under the IBC. Under the code, a resolution plan has to be arrived at within a period of 270 days, failing which the firm goes into liquidation.
In its petition, Singapore-based DBS, one of the secured financial creditors to Jyoti Structures, claimed that the voting for the resolution plan was not conducted in a “fair manner". The bank has 0.73% voting share in the lenders’ consortium.
“The resolution plan had failed to secure the required 75% affirmative voting within the 270 days," claimed Seksaria. He alleged that Standard Chartered Bank and Bank of India had earlier dissented, but reversed their decision, voting in favour of the plan after the deadline.
Senior counsel Ravi Kadam, who appeared for the resolution professional, countered DBS Bank’s claims. “The deadline was over on 8 April 2018 and by that time over 81% lenders had approved the plan."
As per the timeline gleaned from arguments presented by counsels to DBS Bank and resolution professional Vandana Garg, an e-voting process for approval of the resolution plan scheduled on 27 March resulted in only 62.66% of the consortium voting in favour. According to the break-up, 23.12% of those disapproved of the plan while another 14.21% abstained.
To be sure, only one bid was received for Jyoti Structures from a bunch of high net-worth individual investors led by Sharad Sanghi, chief executive officer of Netmagic Solutions. The resolution plan involved an upfront payment of ₹ 170 crore and the balance to be repaid over 15 years.