Reliance Capital Insolvency: Creditors' Committee Fails To Get Relief At NCLAT
The appellate tribunal refused to interfere at this stage saying it won't express any opinion on merits.
The National Company Law Appellate Tribunal refused to express any opinion on the merits of the Reliance Capital Ltd. insolvency case.
Since the matter is already pending before the National Company Law Tribunal and has been going on since Jan 3, the ask of the tribunal seeking a week to pronounce a detailed order is not unwarranted, the appellate tribunal said on Wednesday.
The Committee of Creditors approached the NCLAT on Wednesday seeking relief against the interim directions of the tribunal.
Arguing for the CoC, senior counsel Kapil Sabil said that the interim injunction against the extended challenge mechanism is costing the public money everyday. The Committee of Creditors is entitled to say that an offer is suboptimal, he said. "The order of NCLT is coming in the way of proper discovery of price."
We are losing Rs 45 crore per week. Let the extended mechanism move ahead and let it be put in a sealed cover. It can be considered after the NCLT order comes out. But don’t stop the discovery of value by stalling the process.Kapil Sibal, Counsel, Committee of Creditors
Sibal's reference is to the NCLT's status quo order, which is in operation until all the objections to the "extended auctions" posed by Torrent Investments Ltd. are completely resolved. The tribunal had reserved its order on Jan. 23, saying the final order would be pronounced in the week starting Jan. 30.
The matter reached NCLT after Torrent Investments, which emerged as the highest bidder in the auction concluded in December last year, objected to the CoC considering a revised bid by the Hinduja Group. Calling Hinduja Group's new bid illegal and non-compliant, Torrent Investments approached the NCLT for a direction to the administrator to place only eligible plans before the CoC. On Jan. 4, the court gave Torrent this relief and told the administrator not to bring the allegedly illegal Hinduja Group plan before the CoC.
Torrent has argued that the insolvency law doesn't permit revision of the bid amount. But the Committee of Creditors has said that it has every right to negotiate or renegotiate the proposals in order to maximise value.
Sensing the NCLAT's reluctance to interfere at this stage, CoC's Counsel Sibal moved to withdraw his appeal against the NCLT's interim directions. The appellate tribunal allowed him to do so.