The National Company Law Tribunal (NCLT) has rejected a plea from Torrent Group, which sought to delay the approval of the resolution plan for debt-ridden Reliance Capital, submitted by Hinduja Group firm IndusInd International Holdings Ltd (IIHL). The decision could expedite the conclusion of the insolvency process.
Earlier this week, the insolvency tribunal had adjourned the hearing to September 26. Torrent had requested that the application for approving IIHL's resolution plan be put on hold until a final order was passed by the Supreme Court. However, this appeal was dismissed by the Mumbai bench of the NCLT.
The tribunal cited that the Supreme Court had not issued a stay on proceedings. Furthermore, it was noted that the ongoing delay of the resolution plan was causing weekly losses of Rs 42 crore (Rs 1 crore = $120,594) to Reliance Capital's lenders. The NCLT stated that it was appropriate to hear the resolution plan application despite Torrent Investments' objections.
In addition to this, the tribunal pointed out that the apex court had reserved the rights of parties to participate in a Swiss challenge process on March 20, 2023. However, Torrent had not participated in this extended challenge mechanism nor submitted a resolution plan.
On March 2, 2023, the National Company Law Appellate Tribunal (NCLAT) permitted lenders of Reliance Capital to hold an extended challenge mechanism or second round of auction. This decision overturned a previous order from NCLT's Mumbai bench declaring such an extended round illegal. This ruling was subsequently challenged by Torrent in the Supreme Court.
The corporate Insolvency Resolution Process (CIRP) against Reliance Capital was initiated on November 29, 2021. The company has a consolidated debt of about Rs 40,000 crore. Four Resolution Applicants -- Torrent Investments, IIHL, Cosmea Financial-Piramal Group, and Oaktree Capital submitted their bids following an RFRP issued on April 26, 2022.
The Committee of Creditors (CoC) deemed the bid values received unacceptable, leading to the initiation of a challenge mechanism process on December 21, 2022. Only Torrent and IIHL participated in this process.
With the dismissal of Torrent's plea, the resolution plan proposed by Hinduja Group through IIHL is now awaiting a final order from NCLT's Mumbai bench for approval. This decision marks a significant step towards the resolution of Reliance Capital's insolvency process.
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