Supreme Court agrees to hear Torrent’s appeal against fresh auction of Reliance Capital

He Supreme Court on monday he agreed to listen Torrent InvestmentsAppeal against the decision of the National Chamber of Appeals in Company Law that allowed a second round of auction to take control of the bankruptcy. trust capital (RCap) on March 20.

A bench headed by Chief Justice of India DY Chandrachud said it will hear the case on Monday after senior lawyer Mukul Rohatgi requested an urgent hearing against the NCLATThe March 2 order that allowed RCap lenders to hold a new round of auctions to maximize the value of the debt-laden company in the process of insolvency resolution process (CIRP).

RCap's committee of creditors (CoC) is scheduled to hold the second round of auction next Monday. However, the CJI said orally that it cannot precipitate any action until it knows the matter.

Torrent Investments told the Supreme Court that NCLAT ignored the mandate of the Bankruptcy and Insolvency Code (IBC) to carry out the insolvency process on a limited time basis when it wrongly concluded that the CoC has the power to continue negotiating with the resolution applicants, or abort the resolution process and call a higher offer.

The appeal authority acted in complete contravention of Regulation 39(1A) of the Bankruptcy and Insolvency Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which was introduced to prevent lengthy negotiations by of the CoC and unnecessary delays due to the consideration of Litigation and unsolicited offers, Torrent argued.

“In addition to the complete misapplication and misinterpretation of the regulations, the challenged order should be set aside as it has the potential to compromise the efficiency and effectiveness of the (IBC) code and amounts to penalizing not only the appellant for complying with the process. .but it also jeopardizes the reactivation of the corporate debtor due to the sharp deterioration in the value of its main assets (such as insurance entities) due to the extension of the CIRP”, he stated in his appeal.

The Gujarat-based firm had become the highest bidder with its ₹8,640 crore for the acquisition of trust capital in the initial bidding process that ended on December 21, 2022. One day later, the Hinduja group through IndusInd International submitted a revised offer of ₹9,000 crore. After this, the lenders decided to hold a new round of auction.