Reliance Capital Ltd.'s creditors' committee is trying to prove that the bids from both Torrent Investments Ltd. and Hinduja Group are suboptimal, so that a new auction can begin without impediment, lawyer Mukul Rohatgi told the insolvency court on Tuesday. . .
Arguing in favor of Torrent, Rohatgi said that this CoC approach is illegal and should not be allowed. The committee is "clandestinely doing what is prohibited," she said.
The argument that Torrent's offer does not deliver is unfounded. Minutes of the CoC meeting along with an email communication dated January 7 prove otherwise, lawyers representing Torrent Investments said.
The law only allows for a single auction round and does not recognize multiple rounds, Rohatgi said. The commercial wisdom of the CoC ends in the determination of the auction mechanism. Also, there is no certainty that this is the last round of auctions, he argued.
Torrent had approached the National Company Law Tribunal earlier this month seeking relief against the CoC's plan to consider a revised plan submitted by the Hinduja Group.
The court had granted a provisional measures preventing the creditors' committee from considering any plan breached until the issue is resolved. This led the CoC to unanimously agree to an extension of the first round of auctions in which eligible bidders may submit their revised bids. The new round is expected to start on January 19.
Torrent's argument is that this violates IBC regulations, which allow only one auction round. However, this is simply an extension of the first auction round, according to the creditors' committee.
Darius Khambata, Torrent's lawyer, added to Rohatgi's arguments, saying that not only the CoC but also the trustee unequivocally admit that Torrent's offer is compliant, Hinduja's offer is not compliant, and that the auction process is complete.
According to him, the CoC minutes are enough to prove that Torrent complied. The minutes prove that Torrent has submitted the highest bid of Rs 8,640 crore among all bidders and not Hinduja, as argued by the committee.
"The minutes also prove the illegality of the plan submitted by Hinduja. There are remarks made by the administrator and the committee that their plan is deviant, which was submitted after the conclusion of the tender," Khambata said.
The lawyer for the Reliance Capital administrator, while accepting Khambata's remarks, argued that this does not prevent the CoC from carrying out negotiations and renegotiations with bidders, in order to obtain the optimal value.
The NCLT will continue to hear arguments on Wednesday.
