Reliance Capital insolvency: NCLT rejects Torrent's plea, to hear Hinduja's plan

The National Company Law Tribunal (NCLT) will hear on September 26 the resolution plan for debt-ridden Reliance Capital submitted by Hinduja Group firm IndusInd International Holdings Ltd (IIHL) as Torrent Investments' plea to keep the decision in abeyance has been rejected.

The Mumbai bench of the insolvency tribunal has rejected the Torrent's plea to keep the application for approving IIHL's resolution plan in abeyance till a final order is passed by the Supreme Court in the matter. 

The matter was listed for hearing on Tuesday before the insolvency tribunal, however, it has now been adjourned to September 26.

The NCLT said the Supreme Court on the plea filed by Torrent has 'abundantly' made it clear that it would be kept in abeyance until the parties have had an opportunity to obtain circulation and interim orders of stay in the proceedings. 

However, so far "Supreme Court did not stay the proceedings before us," said a two-member NCLT bench on September 1, 2023.

Besides, it was also submitted that the pendency of the plan is resulting in a loss amounting to Rs 42 crore weekly to lenders of Reliance Capital. 

"Considering, the aforesaid backdrop of facts and circumstances, it is appropriate that the resolution plan application be heard," NCLT had said while rejecting the Torrent Investments' plea. 

The tribunal also said that the apex court had on March 20, 2023, reserved the rights of the parties to participate in the Swiss challenge process. 

"However, it is an undisputed fact that the Applicant (Torrent) has not participated in the extended challenge mechanism nor has the Applicant submitted the Resolution Plan," it said. 

Earlier, the National Company Law Appellate Tribunal (NCLAT) had on March 2 allowed the plea of lenders of Reliance Capital to hold an extended challenge mechanism or second round of auction for the sale of the debt-ridden financial services company. 

It had said lenders of Anil Ambani-promoted Reliance Capital had the power to negotiate and call for a higher bid. It overturned an order of the Mumbai bench of National Company Law Tribunal (NCLT) which had declared the extended challenge round illegal. 

NCLAT ruled that the Committee of Creditors (CoC) can renegotiate the bid amount or call for another round of auction in its "commercial wisdom". 

This order of NCLAT was challenged by Torrent before the Supreme Court. 

The corporate Insolvency Resolution Process (CIRP) against Reliance Capital was initiated by NCLT on November 29, 2021. The company has a consolidated debt of about Rs 40,000 crore. 

An RFRP was issued on April 26, 2022, and four Resolution Applicants -- Torrent Investments, IIHL, Cosmea Financial-Piramal Group and Oaktree Capital submitted their bids. 

The CoC opined that the bid values that have been received are not acceptable and challenge mechanism process was initiated. 

On December 21, 2022, challenge mechanism process was conducted in which only two bidders - Torrent and IIHL participated.