 "NCLT allows Torrent Investment's plea against Reliance Cap lenders")
The National Company Law Tribunal (NCLT) on Thursday allowed Torrent Investments' plea challenging bankers' decision to hold a fresh round of auctions for the takeover of Anil Ambani-promoted Reliance Capital and said the challenge mechanism for financial bids has already concluded.
The order will prevent the lenders of Reliance Capital to hold a second round of auctions in pursuit of higher value for the bankrupt company.
The tribunal, led by Justice Shyam Babu Gautam and Justice Pradeep Narhari Deshmukh, in its order said the bench allows Torrent Investment's application and declared that the challenge mechanism for financial bids stood concluded as on December 21, 2022, with the bid of the applicant at Rs 8,640 crore being the highest.
"It is hereby declared that issuance of process note for extended challenge mechanism is thus in violation of Regulation 39 (1A) of the CIRP Regulations," the order added.
Torrent Investments had filed a plea on January 9, seeking the tribunal to quash the lenders' plans to hold a fresh auction for the takeover of Reliance Capital. Torrent Investment was the highest bidder offering Rs 8,640 crore in the last round of 'challenge mechanism'.
The tribunal had concluded the hearing on Torrent Investments' plea seeking quashing of the lenders' plan for a new round of 'challenge mechanism' on January 23.
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The respondents, administrator and the CoC, will not allow any deviation in the highest NPV (net present value) financial proposal of Rs 8,110 crore of IIHL and the highest NPV financial proposal of Rs 8,640 crore of Torrent Investment, NCLT said in its order.
Further, the order stated, "The resolution plan of IIHL along with the original bid value of Rs 8,110 crore, and not enhanced value, shall be placed before the CoC along with the final plan of the applicant/Torrent comprising of NPV of Rs 8,640 crore."
NCLT, Mumbai bench, further directed that the administrator will take the resolution process of the corporate debtor to its logical conclusion and the Committee of Creditors (CoC) in its own wisdom and absolute discretion shall take appropriate decision to complete the Corporate Insolvency Resolution Process (CIRP), in compliance of the provisions of the code within stipulated period.
The CoC is expected to challenge this order at the National Company Law Appellate Tribunal (NCLAT).
Reliance Capital has a consolidated debt of about Rs 40,000 crore.
The Reserve Bank of India (RBI) had applied to initiate insolvency resolution process against the Reliance Group company at NCLT Mumbai bench.
Subsidiaries of Reliance Capital that are pushed for insolvency resolution are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance, and Reliance Commercial Finance.
RBI-appointed Nageswara Rao Y is the administrator of Reliance Capital's insolvency process.
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