A division bench of the Delhi high court on Monday granted Future Group’s Kishore Biyani a reprieve from a single-judge order that froze his assets and restrained the group he founded from taking any steps to sell its assets to Reliance Industries Ltd (RIL).
On 18 March, Delhi high court’s justice J.R. Midha imposed a monetary penalty on Future Group for breaching an arbitration order passed by the Singapore International Arbitration Centre in October on a plea by Amazon.com Inc. The court also ordered the attachment of Biyani’s assets and served a show-cause on the group for possible detention of Biyani.
Since the division bench has stayed the single judge’s order, Future Group need not comply with the judge’s directions and can proceed with its deal with Reliance Industries.
The division bench comprising chief justice D.N. Patel and justice Jasmeet Singh stayed justice Midha’s order that included certain extreme directions in an earlier interim order originally passed on 2 February, said Future Coupons Pvt. Ltd, a subsidiary of Future Enterprises Ltd, the listed flagship of Future Group, which had sold a 49% stake to Amazon in August 2019 on the condition that Future Group could not forge any alliance with Reliance Industries and 29 other entities without obtaining prior consent from Amazon.
“Since the issues are pending before the Supreme Court in a special leave petition filed by Amazon, the division bench also took on record the Supreme Court’s order, which records that the proceedings before NCLT (National Company Law Tribunal) will be allowed to go without a final order of sanction of the scheme (amalgamation scheme required for the ₹24,713 crore deal) between Future Group and Reliance,” Future Coupons said in a statement.
Future Coupons said that senior advocate Iqbal Chagla, appearing on behalf of the Biyanis, argued that “propriety demanded that since the Supreme Court was seized of the matter, the learned single judge (Midha) ought not to have passed such an order, especially when the division bench had stayed the earlier order. On this ground alone, the order dated 18 March 2021 should be stayed”.
Chagla argued that justice Midha had not even referred to the division bench and the Supreme Court’s orders.
On 8 February, a division bench of Delhi high court had stayed justice Midha’s interim order dated 2 February. According to the division bench’s previous order, a status quo on the deal was to be maintained, which meant Future Retail could take steps to complete the deal with Reliance Industries.
The division bench had said that it was staying the single judge’s order as Future Retail was not a party to the share subscription pact between Amazon and Future Coupons and the US e-commerce giant was not a party to the deal between Future and Reliance.
The interim direction by the division bench was passed on Future Retail’s appeal challenging the 2 February order of the single judge.
Subsequently, on 11 February, Amazon moved the Supreme Court with an appeal for a stay on the division bench order. On 22 February, the apex court, in an interim order, asked NCLT to continue its hearing on the scheme but not to give its final approval to the Reliance-Future deal till the Supreme Court gives its final verdict.
The Supreme Court is likely to hear the matter on 27 April.
The cash-strapped Future Group is trying to expedite the deal with Reliance Industries to pay creditors and save the Big Bazaar retail chain from a possible collapse.
