NCLAT Urges ICICI Bank to Review Jaiprakash Associates' One-Time Settlement Proposal

NCLAT has requested ICICI Bank to consider Jaiprakash Associates Ltd's one-time settlement proposal to resolve its outstanding debts. Despite a previous NCLT order initiating insolvency proceedings, JAL aims to settle within 18 weeks if the proposal is accepted. ICICI Bank has until June 24 to respond.

PTI | New Delhi | Updated: 11-06-2024 20:09 IST | Created: 11-06-2024 20:09 IST
NCLAT Urges ICICI Bank to Review Jaiprakash Associates' One-Time Settlement Proposal
AI Generated Representative Image
  • Country:
  • India

The National Company Law Appellate Tribunal (NCLAT) has directed ICICI Bank to review the one-time settlement (OTS) proposal offered by Jaiprakash Associates Ltd (JAL) to clear its significant outstanding loans.

Jaiprakash Associates has been challenging a recent order from the National Company Law Tribunal (NCLT) Allahabad, which initiated insolvency proceedings against the company.

While hearing the appeal, NCLAT issued a notice to ICICI Bank, suggesting that the private lender consider JAL's OTS proposal by June 24, the next scheduled hearing.

JAL, through its counsel, expressed willingness to complete the payment within 18 weeks if the OTS is approved by the bank. However, creditors contested the proposal, citing a debt exceeding Rs 26,000 crore.

Initially, JAL proposed an OTS to creditors before the NCLT, involving an upfront payment of Rs 200 crore with the remaining Rs 16,000 crore due within 18 weeks, but this was dismissed by NCLT, which directed the commencement of the Corporate Insolvency Resolution Process (CIRP) against JAL.

The NCLAT bench, in its order, also advised JAL to deposit a larger amount by the next hearing date.

NCLAT's decision to issue notices to ICICI Bank and the Interim Resolution Professional (IRP) followed JAL's application to defer the insolvency order, which was earlier declined by NCLT.

The petition by the suspended JAL Board of Directors aimed to counter the NCLT's decision that approved ICICI Bank's six-year-old petition and appointed an interim resolution professional, raising concerns over employees' futures and ongoing projects.

NCLT had previously dismissed JAL's defense of liquidity issues caused by procedural and policy delays, stating the presence of outstanding debt and default as grounds for insolvency admission under the Insolvency and Bankruptcy Code.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback