Vistra ITCL, Reliance Capital’s secured lender, has submitted to the National Company Law Appellate Tribunal (NCLAT) that the NCLT has acted beyond its jurisdiction at a stage where even signed plans have not been presented to lenders for consideration in the ongoing insolvency process of Reliance Capital.
The lender had moved the appellate tribunal against the NCLT verdict staying Reliance Capital’s second auction. NCLAT reserved its decision last week.
“NCLT has usurped the jurisdiction of the Committee of Creditors (CoC) by holding that CoC has to vote on the ₹8,640 crore plan of Torrent and ₹8,110 crore plan of IIHL, and that CoC has no jurisdiction to negotiate even on those figures,” Vistra said in its submission.
Torrent Investments and the lenders to Reliance Capital have been at loggerheads over the submission of bids for the insolvent firm. Essentially, Torrent had submitted a bid of ₹8,640 while Hinduja group submitted a revised offer of ₹9,000 crore which led to the dispute between the two.
The lenders however, in an attempt for achieving maximum value for the bankrupt firm said that both the bids were sub-optimal in nature and were below the liquidation value of the company.
The lender further added that NCLT has not even looked at these plans and there is no ₹8,110 crore plan of IIHL and NCLT has substituted its opinion for that of CoC, which is not permissible under the IBC.
On 2 February, the Mumbai bench of the National Company Law Tribunal (NCLT) ruled against holding a fresh round of auction for the takeover of Anil Ambani-promoted Reliance Capital (RCap) and said the challenge mechanism for financial bids has already concluded.
It upheld the plea by Torrent Investments challenging bankers’ decision to go for the second round of auctions in pursuit of higher value for the bankrupt company. NCLT in its order said the bench allows Torrent Investments’ application and declared that the challenge mechanism for financial bids stood concluded as on 21 December 2022, with the bid of the applicant at ₹8,640 crore being the highest.
