In relief for Torrent Group, a bidder for the Reliance Capital (RCap) assets, the National Company Law Tribunal (NCLT) ruled on Thursday that the proposed second electronic auction violated bankruptcy rules. In addition, the bankruptcy court also rated Torrent as the highest bidder under the first challenge mechanism and ordered the trustee to bring the process to its "logical conclusion."
The move would further delay the insolvency process of the former Anil Ambani group firm, as the trustee and creditors committee (CoC) are scheduled to move the National Company Law Appeal Tribunal (NCLAT), sources said. close to events.
The CoC had decided to pursue the extended challenge mechanism on the basis of a late offer submitted by IndusInd International Holdings (IIHL), NCLT said in its order, adding that the extended challenge mechanism is a violation of Section 39 ( 1A) of the Corporate. Insolvency Resolution Process (CIRP). โThe CoC wrongly assumed the commercial wisdom to run a second challenge mechanism despite concluding a fair and transparent challenge mechanism on December 21, 2022,โ he added. The court, in its 71-page order, also ordered all respondents, the administrator and the CoC to not allow any deviation from the higher Net Present Value (NPV) proposal of Rs 8,110 crore by the IIHL, the firm through which Hinduja Group had made bids, and the highest VPN financial proposal of Rs 8,640 crore for Torrent.
In addition, the IIHL's resolution plan, along with the original bid value of Rs 8,110 crore and not the enhanced value, must be submitted to the CoC along with Torrent's final plan, he said. Torrent had offered an advance payment of Rs 8,640 crore and Hinduja Group, another bidder, was Rs 8,950 crore, including Rs 8,110 crore as down payment. he had earlier moved the NCLT, calling the trustee's decision to conduct another round of the challenge process "illegal."
The court also stated that following the conclusion of the first challenge mechanism, the administrator had confirmed that Torrent's NPV offer of Rs 8640 crore was the highest (in terms of the reissued Request for Resolution Plan (RFRP)). . โIt is further ordered that the administrator shall bring the corporate debtor resolution process (RCap) to its logical conclusion and the CoC in its own judgment and absolute discretion shall make the appropriate decisions to complete the Corporate Insolvency Resolution Process (CIRP)โฆ โ, he added.
The RCap trustee had previously proposed conducting the second round of the challenge mechanism, which was later stayed by the court, in order to maximize the process of RCap's bankruptcy proceedings. The lenders of the former Anil Ambani group company were targeting income of more than Rs 10,000 crore from the insolvency proceedings. On Wednesday, the bankruptcy court granted a 45-day extension for the conclusion of RCap's insolvency process, compared to the 90 days requested by the administrator, since the current term ended on January 31. The new deadline to conclude the process would now be March 17. .
