The bankruptcy court ruled in favor of Torrent Investments on Thursday in its appeal against the lenders' decision to hold a second auction for the sale of Reliance Capital and a late enhanced offer from the Hinduja Group after the bankrupt company's auction It will end on December 21.
According to a bank Justice division PN Deshmukh and technical member Shyam Babu Gautam, the creditors' committee (CoC) cannot devise an "illegal mechanism" to circumvent the regulations and indirectly continue dealing with resolution applicants after the conclusion of the legal scheme of the challenge process under Regulation 39(1A).
Torrent was the highest bidder in the previous round of the auction, which ended on December 21, offering Reliance Capital an initial payment of Rs 8,640 crore. The Hinduja Group, however, made another offer 24 hours after the auction deadline, promising to pay Rs 8,950 crore, including Rs 8,110 crore up front. Both offers were below liquidation value.
After that, the lenders proposed to hold an extended auction with a threshold of Rs 9,500 crore, including an advance cash payment of Rs 8,000 crore.
On January 3, the NCLT ordered a standstill in the auction process and extended the stay on January 23.
After that, the CoC petitioned the appeals court to reverse the bankruptcy court's order on the status quo. However, the committee later decided to withdraw the application.
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