NCLAT closes insolvency proceedings against JHL as Max Healthcare settles creditor’s claims

The National Company Law Appellate Tribunal (NCLAT) has closed the insolvency proceedings against Jaypee Healthcare after the financial creditors’ dues were settled by Max Healthcare.

The appellate tribunal’s direction to close the Corporate Insolvency Resolution Process (CIRP) against Jaypee Healthcare Ltd (JHL) came after the financial creditor submitted that they had received the amount of ₹1,035.29 crore as part of the settlement and no claim had survived.

“In view of the fact that the entire claim has now been satisfied and the amount deposited has been disbursed, we see no reason to continue the CIRP any further,” said the NCLAT order passed on Thursday (October 18, 2024).

CIRP against JHL was initiated by the Allahabad bench of the National Company Law Tribunal (NCLT) on June 14 this year, over a petition filed by its lead creditor JC Flowers Asset Reconstruction Ltd.

This was challenged by the Manoj Gaur-led parent group firm Jaypee Infratech Ltd (JAL) before the appellate tribunal NCLAT.

During the insolvency, Max Healthcare on September 13, announced to acquire 64% stake in JHL for an enterprise value of ₹1,660 crore.

It had entered into a strategic agreement with Lakshdeep Group, the promoter of Jaypee Healthcare, which operated a 500-bed Jaypee Hospital in Noida, as well as two other hospitals located in Bulandshahr and Anoopshahar – in Uttar Pradesh.

“Strategic Partner (Max Healthcare) had deposited an amount equivalent to the admitted financial creditor claim (₹ 1,035.29 crore settlement amount) in the designated bank account of the Corporate Debtor (JHL) which had subsequently been distributed to the financial creditors of the Corporate Debtor in terms of the Lakshdeep Proposal,” said an affidavit filed by JHL before NCLAT.

It further said the CoC (Committee of Creditors) members acknowledged receipt of the Settlement Amount on a non-recourse basis and took note of the implementation of the Lakshdeep Proposal.

Observing the development, NCLAT in its order said,”In view of the aforesaid, we set aside the Order dated June 14, 2024, impugned… Both the Appeals are disposed of accordingly and CIRP stands closed.”