MUMBAI : Torrent Investments, one of the highest bidders in the Reliance Capital (RCap) insolvency, has asked the Supreme Court to challenge a recent order by the National Companies Act Appeals Tribunal (NCLAT), a court listing shows. โThe Committee of Creditors (CoC) had voted in favor of Torrent's resolution plan and after the prescribed deadlines, Hinduja submitted a better offer. Once the resolution plan has been approved by the CoC, a third party cannot be allowed to submit a new resolution plan, especially as Hinduja failed to meet the deadlines set by the resolution professional," said a lawyer familiar with the development.
If the CoC accepts Hinduja's plan and even if it is a better plan, it would create bias against Torrent, the lawyer said. โAt this rate, there will never be finality and the process may continue for a long time, which could erode the value of RCap's assets and affect the chances of maximizing value,โ he said.
On March 2, the appeals court allowed a request by Reliance Capital's CoC to hold a second auction for the debt-laden company. NCLAT, in its verdict, had struck down an order by the National Company Law Tribunal (NCLT) that had stayed the lenders' proposal to hold another auction.
The appeals court had held that the CoC is fully empowered to continue negotiating with one or more ruling applicants, even after completing the challenge mechanism on December 21. It had also said that the CoC's decision on January 6 to launch an expanded challenge mechanism does not violate Regulation 39 (1A) of the Insolvency and Bankruptcy Code (IBC).
The CoC then scheduled the second auction for March 20.
The legal dispute between Torrent Investments and the lenders began after Torrent submitted its offer of $8,640 crore for RCap, but rival bidder Hinduja Group through IndusInd revised its offer to $9,000 crores. Following this, the CoC decided to propose an expanded challenge mechanism to gain greater value for the company. Torrent's reason for his legal challenge was that if the deadlines were not met, it could hinder the sanctity of the process itself.
catch all corporate news and updates on Live Mint. download the mint news app to get daily Market Updates & Live business news.
