The Reliance Capital administrator, at the NCLT hearing on Wednesday, proposed to hold the second challenge mechanism on January 23, pending and subject to NCLT's final decision.
The auction was previously scheduled for January 19, but has now been extended pending NCLT's decision on Torrent Investment's request to suspend the second round. A detailed order is awaited as Reliance Capital's CoC has yet to complete its arguments.
NCLT recorded the administrator's submission and also noted the CoC's request that neither bidder be able to withdraw from the resolution process now. The court will continue hearing the case on Thursday.
Torrent Investments had emerged as the highest bidder after the first round of the auction, with the highest NPV bid of ₹8,640 crore. However, a day later, the only other bidder, the Hinduja Group, revised its proposal to outbid Torrent Investments. The latter brought Reliance Capital to NCLT, claiming that Hinduja's revised offer should not be considered and that going to a second auction would be illegal and against the spirit of IBC.
Mukul Rohatgi, representing Torrent, said the second auction is an attempt by the CoC to circumvent the NCLT's stop order by considering Hinduja's revised bid. The CoC has gone against the resolution framework and there is no guarantee that the second auction will be final, he added.
Lead counsel Kapil Sibal, representing the CoC, said the final word on accepting bids rests with the CoC, which has the right to reject bids if they are suboptimal. He also pointed to the fact that Torrent Investments' argument that Hinduja's revised offer was ineligible is incorrect, as Torrent later also offered to revise its offer by offering the entire Rs 8,640 crore as initial cash.
"The CoC falsely claimed that our offer had some shortcoming and therefore, to avoid any discrepancy, we offered the full amount of ₹8,640 crore as initial cash," Torrent replied, adding that there can be no "infinite wisdom" in the offer. CoC by value maximization. Darius Khambata, also on behalf of Torrent, questioned how the CoC can qualify offers as sub-optimal if they fall within the threshold set by the CoC.
Sibal also argued that final resolution plans have not yet been received by the CoC and that Torrent's petition is premature and should therefore be dismissed, adding that the significant upward revision of bids over the last month indicates that there is more value to unlock.
“CoC reserves the absolute right to override the resolution process, reject all plans and request new resolution plans in accordance with the law,” Ravi Kadam said on behalf of the administrator.
