NCLT Delhi Approves JNC Constructions Resolution Plan Following Supreme Court Remand For Stakeholder Compliance

The National Company Law Tribunal (NCLT) New Delhi Bench, led by Justice Jyotsna Sharma and Member (Technical) Anu Jagmohan Singh, has officially approved the resubmitted resolution plan for JNC Constructions Pvt. Ltd. This decision follows a landmark intervention by the Supreme Court of India, which had previously set aside a 2020 order due to procedural lapses regarding creditor notification.

The Path to Resolution

The Corporate Insolvency Resolution Process (CIRP) of JNC Constructions was initiated in May 2019. While an initial resolution plan was approved in 2020, the Supreme Court directed a fresh review after the Greater Noida Industrial Development Authority (GNIDA) successfully argued that its status as a secured creditor had been disregarded and that it had not been properly notified of proceedings.

The resolution plan, submitted by a consortium of Gautam Builders and Rapid Contracts Pvt. Ltd., was subsequently amended to address these legal infirmities. The Committee of Creditors (CoC) voted overwhelmingly in favor of the revised plan, which includes specific provisions for the settlement of claims held by GNIDA and the Uttar Pradesh Awas Evam Vikas Parishad (UPAVP).

Legal Hurdles and Judicial Restraint

During the hearings, the NCLT emphasized that its role under the Insolvency and Bankruptcy Code (IBC), 2016, is one of limited judicial review. The tribunal noted that it cannot substitute the commercial wisdom of the CoC, provided the plan meets the statutory requirements of Section 30(2) of the Code.

"The adjudicating authority has limited jurisdiction in the matter of approval of a resolution plan , which is well-defined and circumscribed by Sections 30(2) and 31 of the Code," the bench observed, referencing established precedents.

Claim Dispute Dismissal

In a separate but related development, the NCLT dismissed an application filed by one Sulekha Kalra, who sought the admission of a claim regarding Apartment No. D-1206. The tribunal found that the applicant had previously filed the claim as an unsecured loan rather than an allotment claim. Because there was no contemporaneous record to support the allotment of the specific flat, the bench upheld the decision of the Resolution Professional to treat the claim as an unsecured financial debt.

Key Observations

The tribunal’s order underscored several critical legal principles for future insolvency proceedings:

  • "The resolution plan shall be sent back to the CoC for re-submission after satisfying the parameters set out by the Code."
  • "In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC."
  • "All the operational creditors shall be paid in priority over the financial creditors in terms of Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016 ."

Implications for Stakeholders

The approved plan provides a roadmap for the completion of projects "The Park" and "Green Wood." The successful resolution applicant has committed to bearing additional financial liabilities concerning EWS housing, ensuring no extra burden falls upon the homebuyers. Furthermore, the tribunal directed the formation of a Monitoring Committee to oversee the implementation of the plan, with mandatory quarterly reporting to the NCLT to ensure total transparency and adherence to the court-approved timelines.