The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday granted more time to Future Retail Ltd (FRL) to file its response to a Bank of India petition seeking to initiate insolvency resolution proceedings against the company for defaulting on loans.
Bank of India, the lead banker of the consortium of lenders to the retailer, filed the petition before the NCLT to initiate insolvency proceedings against FRL on 14 April. The tribunal had granted a week to FRL to file its response in the matter. However, the company again sought time to file its response, which the tribunal granted.
Shyam Kapadia, the counsel representing FRL, told the court that the delay in filing the reply was because some directors and key personnel of the company had stepped down, and some of their terms had expired. He argued that there was no ‘urgency’ in the case that required the right to file a reply to be taken away. “Nothing significant will happen in a week,” Kapadia argued.
Opposing Kapadia’s request, Ravi Kadam, senior counsel for Bank of India, said there was an overwhelming need to appoint an interim resolution professional and admit the bank’s petition against the company under the Insolvency and Bankruptcy Code. He added that FRL had earlier agreed to file its reply within a week’s time.
Kadam informed the court that the company had a huge debt of over ₹15,000 crore, including a large amount of public money.
He said that the stepping down of the company’s key officials was all the more reason for the petition to be expeditiously admitted by the court.
Amazon moved an intervention application asking the court to make it a party to the matter. The online retailer alleged that banks colluded with FRL to obstruct and deny Amazon of its rights.
On 10 May, in its letter to the Reserve Bank of India, the US e-commerce giant said that It is the duty of banks in India, more specifically, public sector banks, to ensure compliance with fiduciary duty towards the public. However, lender banks of FRL have acted in a completely irresponsible and collusive’ manner despite having knowledge of FRL’s illegal actions. Thus, the present letter is being issued requesting for a forensic investigation to be carried out with respect to these collusive actions of FRL and all its lender banks,” Amazon said.Source: Mint