The National Corporation Law Appeals Court on Tuesday issued notices to Torrent Group and other defendants to file their responses within three days to a petition seeking a second round of electronic auction for Reliance Capital, which is currently in insolvency resolution process. .
A two-member bench of the National Company Law Appeals Tribunal (NCLAT) has listed the case for a hearing on Thursday.
The decision came after lenders from the Vistra ITCL (India)-led firm appealed to the court of appeal against a February 2 order from the National Company Law Tribunal (NCLT) which found the proposed second electronic auction to be in violation of bankruptcy rules.
The court also rated Torrent Group as the highest bidder under the first challenge mechanism and ordered the administrator to bring the process to its “logical conclusion”.
Following this, the Rcap lenders moved to the appeals court stating that failure to hold another round of auction would lead to an initial loss of ₹5,010 crore.
According to the creditors' committee (CoC), RCap's admitted debt exceeds Rs 25,000 crore, including public money, and the aim of the insolvency proceedings was to seek "maximization of value".
The CoC was “disappointed time and time again with the offers of the bidders”, they said among the reasons for moving to the court of appeal.
They also alleged that the entire corporate insolvency resolution process is paralyzed because the plans were not submitted to the CoC and the second mechanism was put on hold. The petition has also stated that there were a number of inaccuracies in NCLT's February 2 order.
According to the first challenge mechanism, Torrent Group had submitted a resolution plan with a Net Present Value (NPV) of Rs 8.64 billion, while Hinduja Group had Rs 8.11 billion.
