NCLAT To Hear Yamuna Expressway's Plea For Further Compensation From Jaypee Infratech

There is substantial ground to hear the appeal by the Yamuna Expressway Industrial Development Authority against the rejection of its compensation claims in the Jaypee Infratech resolution case, according to the National Company Law Appellate Tribunal.

The bench noted that the National Company Law Tribunal, in its order, has virtually extinguished YEIDA's claim for additional compensation to the farmers.

The appellate tribunal said that NCLT's order approving the resolution process should not be relied upon for determining any liability regarding additional compensation between YEIDA and Jaypee Infratech.

The bench also granted liberty to the homebuyers to file an intervention application within a period of two weeks from the order.

The NCLAT had on Friday reserved its order in an appeal filed by YEIDA in the insolvency case of Jaypee Infratech. The NCLT had approved Suraksha Group's resolution plan for Jaypee Infratech.

YEIDA had submitted that it is not against the resolution plan but appeals only to the extent of rejection of its claim regarding additional compensation for farmers whose land was acquired and allotted to Jaypee Infratech. The obligation to pay the compensation for the farmers is on the allottee [Jaypee Infratech] and not on the authority. YEIDA does not even have the responsibility to collect this compensation, it argued.

YEIDA’s claims include Rs 6,111 crore for external development charges (EDCs) as well as Rs 1,689 crore for additional compensation to the farmers. However, the approved resolution plan proposed a payment of Rs 10 lakh against development claims. No compensation was provided for the farmers in the plan.

The tribunal had held that YEIDA is not a part of the committee of creditors, which is why it does not hold the power to approve or reject a resolution plan on a commercial basis. It upheld the allocation of Rs. 10 lakh by Suraksha Group for EDCs.

Suraksha Group has considered the claims made by YEIDA as operational debt and dealt with them as per the insolvency code. The NCLT did not find any legal infirmity with this reasoning and held that YEIDA is an operational creditor.

It is pertinent to note that the question of whether the additional compensation for farmers is to be paid by YEIDA or Jaypee Infratech was under consideration in an arbitration proceeding as well. Earlier, the arbitral award came in favour of Jaypee Infratech but was challenged by YEIDA before a commercial court.

The NCLAT will hear the matter next on May 29.