In a setback for not just Jaypee Associates, but also for homebuyers, the Supreme Court on Wednesday barred the promoter entity from bidding for the resolution of Jaypee Infra.
The SC today held that entities that are barred under Section 29A of the IBC cannot be allowed to proceed with the bidding process. Section 29A of the IBC provides for an absolute ban on promoter entities of insolvent companies from bidding in the resolution process. In passing these directions, the SC has reinforced the ban placed on Jaypee Associates by the NCLAT.
This comes as a setback for homebuyers who were hoping that the entry of Jaypee Associates would make for a faster resolution process.
However, the court has opened doors for round 3 of bidding for Jaypee Infra. Despite the time restrictions provided under IBC, the SC exercising extraordinary powers under Article 142, has allowed for a 90-day extension for the resolution process. The SC has also clarified that this extension should not be served as a precedent.
With this 90-day window, the SC has now allowed two entities to participate in round 3 bidding. The SC has allowed NBCC and Suraksha Realty to participate in the bidding process. The SC has allowed 45 days for submitting fresh bids, and 45 days to the COC for processing and considering of the fresh bids.
The SC also clarified that no pending case in any court shall serve as an impediment to the NCLAT led resolution process.
NBCC had sought to participate in the fresh round of bidding, even submitting its latest revised bid before the SC in a sealed cover, after the government assured NBCC of relaxing the pending tax demands against Jaypee Infra.