ยฉ Reuters.
The National Company Law Tribunal (NCLT) has rejected a plea by Torrent Group, which sought to delay the approval of the resolution plan for debt-laden Reliance Capital, filed by Hinduja Group firm IndusInd International Holdings Ltd (IIHL). The decision could speed up the conclusion of the insolvency process.
Earlier this week, the bankruptcy court had postponed the hearing until September 26. Torrent had requested that the request for approval of the IIHR resolution plan be put on hold until the Supreme Court issued a final order. However, this appeal was dismissed by the Mumbai bench of the NCLT.
The court cited that the Supreme Court had not stayed the proceedings. Further, it was noted that the current delay in the resolution plan was causing weekly losses of Rs 42 crore (Rs 1 crore = $120,594) to Reliance Capital's lenders. The NCLT stated that it was appropriate to hear the resolution plan application despite the objections of Torrent Investments.
In addition to this, the court noted that the high court had reserved the right of the parties to participate in a Swiss challenge process on March 20, 2023. However, Torrent had not participated in this expanded challenge mechanism nor had it submitted a resolution plan.
On March 2, 2023, the National Company Law Appellate Tribunal (NCLAT) allowed Reliance Capital's lenders to conduct an expanded challenge mechanism or second round of auction. This decision overturned an earlier order of the NCLT's Mumbai court that declared such a prolonged round illegal. This ruling was later challenged by Torrent before the Supreme Court.
The corporate insolvency resolution process (CIRP) against Reliance Capital was initiated on November 29, 2021. The company has a consolidated debt of approximately Rs 40,000 crore. Four resolution applicants: Torrent Investments, IIHL, Cosmea Financial-Piramal Group and Oaktree Capital submitted their bids following an RFRP issued on April 26, 2022.
The Committee of Creditors (CoC) considered the values โโof the offers received unacceptable, which led to the initiation of a challenge mechanism process on December 21, 2022. Only Torrent and IIHL participated in this process.
With the dismissal of Torrent's petition, the resolution plan proposed by Hinduja Group through the IIHL is now awaiting a final order from the Mumbai bench of the NCLT for approval. This decision marks a significant step towards the resolution of Reliance Capital's insolvency proceedings.
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