Anuj Jain Interim Re... v. Axis Bank Limited Et..., Supreme Court Of India, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Appeal No(s). 8512-8527/2019, (For Admission and IA No. 169228/2019-Ex-Parte Stay), C.A. No. 6777-6797/2019 (XVII), (For Admission and I.R. and IA No. 134370/2019-Exemption From Filing C/C of the Impugned Judgment), Diary No(s). 32881/2019 (XVII), (For Admission and IA No. 172262/2019-Permission to File Additional Documents/Facts/Annexures and IA No. 173663/2019-Permission to File Additional Documents/Facts/Annexures, IA No. 190464/2019-Permission to File Appeal, IA NO. 190465/2019-Stay Application, IA No. 190466/2019-Exemption From Filing C/C of the Impugned Judgment and 190467/2019-Permission to File Additional Documents/Facts/Annexures)

Disposition

allowed

Judges

A.M. Khanwilkar
Dinesh Maheshwari, JJ.

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Smart Summary

Factual and Procedural Background

The appeals before the Supreme Court challenge a ruling of the National Company Law Appellate Tribunal (NCLAT). The NCLAT had allowed applications by the lender-banks of Jayprakash Associates Limited (JAL) seeking recognition as “financial creditors” of Jaypee Infratech Limited (JIL). Earlier, the National Company Law Tribunal (NCLT) had rejected the banks’ claim. Permission to file the instant appeals was granted and the appeals were formally admitted. Oral arguments in Civil Appeal @ Diary No. 32881/2019 concluded on 28 November 2019, and arguments in the companion appeals (C.A. Nos. 8512-8527/2019 and 6777-6797/2019) concluded on 10 December 2019. Judgment has been reserved, with the Court permitting additional written submissions (maximum five pages) to be filed by 16 December 2019.

Legal Issues Presented

Whether the lender-banks of Jayprakash Associates Limited can legally be regarded as “financial creditors” of Jaypee Infratech Limited under the Insolvency and Bankruptcy Code, 2016.
Whether, consequent upon such classification, the banks are entitled to be included in the Committee of Creditors (CoC) of Jaypee Infratech Limited.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

After hearing counsel for all parties, the Supreme Court expressed a prima facie view that the lender-banks of JAL cannot be considered financial creditors of JIL. The Court noted that the NCLAT had allowed the banks’ appeal without addressing the reasons recorded by the NCLT. To prevent disruption or “confusion” in the ongoing revival process of JIL and the constitution of its Committee of Creditors, the Court considered it appropriate to stay the operation of the impugned NCLAT judgment. The stay is expressly confined to the order declaring the banks as financial creditors and their inclusion in the CoC; other aspects remain unaffected. Full reasons will be set out in the Court’s final judgment.

Holding and Implications

Interim Order: The Supreme Court stayed the operation of the NCLAT judgment that had recognised the lender-banks of JAL as financial creditors of JIL, limited to that specific declaration and their inclusion in the CoC. The appeals have been admitted, hearings are concluded, and judgment is reserved.

Implications: The stay preserves the status quo of JIL’s insolvency resolution proceedings, ensuring that its Committee of Creditors is constituted without the contested lender-banks until the Court issues a final decision. No broader legal precedent is set at this interim stage.

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Anuj Jain Interim Resolution Professional For Jaypee Infratech Limited (S) v. Axis Bank Limited Etc. Etc . (S).

1. I.A. No. 190464/2019-Application seeking permission to file appeal(s) is allowed.

2. Appeal(s) are admitted.

3. Arguments in Civil Appeal @ Diary No(s). 32881/2019 were concluded on 28.11.2019.

4. Thereafter, the arguments in the companion appeal(s) (C.A Nos. 8512-8527/2019 and C.A. No. 6777-6797/2019) commenced and have been concluded today i.e. 10 December, 2019.

Civil Appeal @ Diary No(s). 32881/2019

5. These appeals take exception to the decision of the National Company Law Appellate Tribunal allowing the appeal(s) filed by the lender-Banks of Jayprakash Associates Limited (JAL) claiming to be financial creditor(s) of Jaypee Infratech Limited (JIL). The National Company Law Tribunal had rejected that claim but we find that in the impugned judgment, without dealing with the reasons recorded by the National Company Law Tribunal, the Appellate Tribunal allowed the appeal(s) filed by the stated lender-Bank(s), who were claiming to be the financial creditor(s) of JIL.

6. After fully hearing counsel for the parties, prima facie, we are of the view that lender-Banks of JAL cannot be regarded as financial creditor(s) of JIL. We would elaborate on this aspect in our final judgment. Be that as it may, it is appropriate that we must stay the operation of the impugned judgment(s) of the Appellate Tribunal lest any confusion occurs in the revival process of JIL and the constitution of Committee of Creditors thereof, in view of the impugned order passed by the National Company Law Appellate Tribunal. Ordered accordingly.

7. We clarify that the stay of operation is only in respect of order passed on the application(s) moved by the lender-Bank(s) of JAL before the National Company Law Appellate Tribunal for a declaration that they be regarded as financial creditor(s) of JIL and included in the Committee of Creditors of JIL.

C.A Nos. 8512-8527/2019, 6777-6797/2019 and Diary No. 32881/2019

8. Hearing concluded.

9. Judgment reserved.

10. Counsel for the concerned parties are free to file additional written submissions, not exceeding five pages each before 16 December, 2019.

11. The Registry shall not accept any written submissions tendered after 16 December, 2019.

Anuj Jain Interim Re... v. Axis Bank Limited Et...