The Supreme Court on Monday refused to grant a stay of the order issued by the National Companies Act Court of Appeal in the insolvency case of Reliance Capital Ltd.
The high court has also allowed the parties to go ahead and participate in the proceeding as outlined in the NCLAT order without prejudice to their rights and restraints. This means that the creditors' committee can go ahead with the extended auction plan.
The high court will next hear the matter in August.
Earlier this month, the National Company Law Appeals Court held another round of auctions for debt-ridden Reliance Capital, allowing the Creditors Committee to take the position of an extended round of auctions.
The tribunal held that the CoC is fully empowered to continue to negotiate with one or more ruling applicants, even after completing the Challenge Mechanism.
Furthermore, the tribunal noted that even if Torrent Investments' plan, as a consequence of the Challenge Mechanism held on December 21, 2022, were the most valuable, it has no right to insist that the plan must be put to a vote by the CoC.
The case came to NCLAT after the National Company Law Tribunal had the CoC's plan for an "extended round of auctions." He had allowed Torrent Investments' request, considering it the highest bidder in the auction process.
Reliance Capital's bidding process concluded on December 21, 2022, with Torrent emerging as the highest bidder at Rs 8,640 crore.
However, a day after the electronic auction, Hinduja Group, the promoter of IndusInd Bank Ltd., had a bid of Rs 8,110 crore to Rs 9,000 crore. This prompted Torrent to approach the NCLT to ask the trustee not to submit Hinduja Group's default plan to the CoC.
On January 4th, the NCLT had given Torrent this. However, the CoC was of the opinion that it had the right to call a suboptimal offer and had every right to negotiate or renegotiate proposals to maximize value.
