# Anuj Jain Interim Resolution Professional For Jaypee Infratech Limited Vs. Axis Bank Limited Etc. Etc. Civil Appeal Nos. 8512-8527 of 2019 with other appeals.

> SC judgment dated 2020-02-26. Citation: TCN-2020-SC-00069. The case involves appeals against an order by the National Company Law Appellate Tribunal (NCLAT)…

- **Court:** SC
- **Order date:** 26 Feb 2020
- **Citation:** TCN-2020-SC-00069
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/anuj-jain-interim-resolution-professional-for-jaypee-infratech-limited-vs-axis-b-54f49bd6

## Summary

### Background

The case involves appeals against an order by the National Company Law Appellate Tribunal (NCLAT) which overturned an order by the National Company Law Tribunal (NCLT). The NCLT had declared certain transactions by Jaypee Infratech Limited (JIL), the corporate debtor, as preferential, undervalued, and fraudulent. These transactions involved mortgaging JIL's properties to secure loans for its holding company, Jaiprakash Associates Limited (JAL). The Interim Resolution Professional (IRP) initiated proceedings to avoid these transactions. Additionally, the case addresses whether lenders of JAL can be categorized as financial creditors of JIL.

## Facts

Jaypee Infratech Limited (JIL), a corporate debtor, underwent Corporate Insolvency Resolution Process (CIRP). JIL's Interim Resolution Professional (IRP) filed an application alleging that JIL had mortgaged its properties to secure loans for its holding company, Jaiprakash Associates Limited (JAL). These transactions were questioned as being preferential, undervalued, and fraudulent. JAL held approximately 71.64% equity shareholding in JIL as on 31.03.2017. IDBI Bank Limited initiated CIRP against JIL for defaulting on Rs. 526.11 crores. NCLT initiated CIRP on 09.08.2017. The NCLT initially accepted the IRP's application regarding six mortgage transactions, but NCLAT overturned this. The mortgage deeds in question were executed between 2016 and 2017. The lenders of

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## Issues and analysis

### Issue 1: Whether the impugned transactions are preferential, falling within the ambit of sub-section (2) of …

**Ratio:** Section 43 of the IBC defines preferential transactions and provides for their avoidance.

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**Reasoning:** The Supreme Court reasoned that the mortgage transactions by JIL in favor of JAL's

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**Interpretation:** The court interpreted Section 43 to mean that any transaction benefiting a

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**Application:** The court applied the ratio to the specific facts, finding that the mortgages

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## Parties

- **Judges:** DINESH MAHE…; A.M. KHAN…
- **Appellants:** Anuj Jain Interim…
- **Respondents:** Jaypee Infratech…; Axis Bank L…
- **Other parties:** 7th Edition…; Avoidance…; +3 more

## Timeline

- **2003-01-01 — JAL awarded rights for…**: Jaiprakash Associates Limited (JAL) was awarded the rights for the construction of an…
- **2015-09-30 — JIL declared N…**: Jaypee Infratech Limited (JIL) was declared a Non-Performing Asset (NPA) by Life…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

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