NCLT Delhi Approves Revised Resolution Plan For JNC Constructions After Supreme Court Remand

The Delhi bench of the National Company Law Tribunal (NCLT) has approved the resubmitted resolution plan for JNC Constructions Pvt. Ltd., submitted by Gautam Builders in consortium with Rapid Contracts Pvt. Ltd.

The approval comes after the Supreme Court set aside the tribunal's 2020 order and directed the Committee of Creditors (CoC) to reconsider the plan.

A coram of Judicial Member Jyotsna Sharma and Technical Member Anu Jagmohan Singh observed that the tribunal's powers while considering a resolution plan are limited.

"...it is amply clear that only limited judicial review is available to the Adjudicating Authority under Section 30(2) read with Section 31 of the Code, 2016 and this Adjudicating Authority cannot venture into the commercial aspects of the decisions taken by the committee of the creditors.", it observed while approving the plan.

The resolution plan was first approved in August 2020. In February 2024, the Supreme Court set aside that approval after allowing appeals by the Greater Noida Industrial Development Authority (GNIDA). It found that GNIDA had not been served notice of CoC meetings despite being a secured creditor by operation of law.

The apex court also noted that the resolution plan proceeded as though GNIDA had not submitted a claim. It directed the CoC to reconsider the plan after ensuring compliance with the Insolvency and Bankruptcy Code (IBC) and the CIRP Regulations.

Following the Supreme Court's directions, the Resolution Professional reconsidered the claims of GNIDA and Uttar Pradesh Awas Evam Vikas Parishad (UPAV). GNIDA's admitted claim was ₹37.50 crore, while UPAV's stood at ₹123.07 crore.

The Successful Resolution Applicant later submitted an addendum to the resolution plan. It proposed payments of ₹15.91 crore to GNIDA and ₹17.08 crore to UPAV. Both authorities will receive ₹4 crore within 90 days of the plan's approval. The remaining amount will be paid in four instalments over two years.

The CoC approved the revised plan with a 96.07% voting share. The tribunal noted that operational creditors would be paid before financial creditors, as required under the IBC. It also recorded the Successful Resolution Applicant's undertaking to bear any additional liability relating to EWS flats without passing the burden on to homebuyers.

GNIDA had also argued that lease rentals accruing during the CIRP should be treated as CIRP costs. The tribunal observed that the NCLAT has consistently held otherwise. However, it took on record the Successful Resolution Applicant's undertaking to pay those dues if the Supreme Court later rules that they qualify as CIRP costs.

Finding that the resolution plan complied with the requirements of the IBC and the CIRP Regulations, the tribunal approved it.