The city bench of NCLT Wednesday approved the amended resolution plan for Jyoti Structures by Sharad Sanghi of Netmagic that has now offered to pay Rs.3,965 crore in 12 years to the lenders and other creditors.
The decision follows an order by the appellate tribunal last week. Surprisingly, on Tuesday (March 26) the Mumbai bench of the National Company Law Tribunal (NCLT) had adjourned the case to April 26 for a final view.
Jyoti Structures, which owes Rs 7,010.55 crore and unpaid interest to the lenders, is among the first 12 large accounts referred to NCLTs by the Reserve Bank in June 2017.
Under the amended bid, the sole bidder Sanghi, who is the managing director and chief executive of data centre company Netmagic, told NCLT that he will pay Rs.3,965 crore in 12 years against the original bid of 15 years to the lenders.
Further, under the revised plan, he will pay Rs 147 crore will be paid to workman, Rs 11 crore statutory dues will be paid immediately and the rest Rs 115 crore will be paid to operational creditors over a period of seven years, the tribunal was informed.
Sanghi Monday submitted a revised bid following an order by National Company Law Appellate Tribunal last week.
However, DBS Bank, which is the first charge-holder in the case, had Tuesday opposed the NCLT move to accept Sanghi’s amended resolution plan and had decided to challenge the same in the Supreme Court.
DBS Bank, which has a Rs 53.77 crore claim on the company, is peeved by the fact that the amended plan does not distinguish between the first charge-holder and the second charge-holder.
Last week the NCLAT had set aside a Mumbai bench’s July 31, 2018 order to liquidate Jyoti Structures, and sent the matter back to the Mumbai bench to reconsider the resolution plan submitted by Sanghi.
The Mumbai bench had on July 31,2018, rejected Sanghi’s bid and ordered liquidation of the company.
According to the Rs 3,965.06-crore resolution plan by Sanghi along with others, Rs 50 crore would be paid upfront, followed by Rs 75 crore over the next 12 months and the remaining in staggered payments over the next in 15 years.
On March 26 and 27, 2018, Sanghi’s resolution plan was voted by 62.66 percent of lenders, while 23.12 percent voted against, and 14.21 percent abstained. But later, on April 2, 2018, some lenders changed their minds and agreed to accept the proposal, taking the final tally of those lenders accepting the proposal at 81.31 percent.
But Sanghi’s resolution plan was rejected by NCLT on the two grounds, citing delays beyond the mandated 270 days and the absence of required majority of 75 percent at the March 26 & 27, 2018 voting when only 62.66 percent of the lenders had accepted the bid.
Following this, Sanghi had in August moved the NCLAT, which stayed the liquidation process, saying the NCLT did not consider the eight-day gap between the firm being admitted for bankruptcy and appointment of interim resolution professional.
The appellate tribunal, staying the liquidation, also noted that the application was admitted on July 4, 2017 and was uploaded on July 12, and the interim RP joined thereafter, thus leaving an eight-day gap and that if the aforesaid period of eight days is excluded, the resolution plan was approved within 270 days which the NCLT has failed to note.