Rejecting a petition filed by Torrent Group, the Supreme Court on Monday refused to stay a National Company Law Appellate Tribunal (NCLAT) order that permitted holding of a second e-auction for debt-laden Reliance Capital (RCap).
The move enables RCap’s committee of creditors (CoC) to proceed with its plans of inviting expressions of interests from resolution applicants and hold the proposed extended challenge mechanism. However, the outcome of the auction will depend on the apex court’s final order, with the matter listed for hearing again in August.
The bench comprising justices Sanjiv Khanna and MM Sundresh did not pass any order. The CoC is likely to meet later on Monday to finalise the date to hold the extended challenge mechanism, now slated for March 29. Earlier, the lenders had decided to hold the e-auction on Monday itself, but decided to wait till the apex court pronounces its order.
Senior advocate Mukul Rohatgi appeared on behalf of Torrent Investments, a group company through which the Gujarat-based Torrent Group had placed its bid for the entire assets of RCap. Earlier this month, Torrent Group moved the Supreme Court against NCLAT’s order that permitted holding an extended auction for the debt-laden firm. Vistra ITCL (India), a member of the CoC was the respondent to the case.
The appellate tribunal had permitted holding the second e-auction allowing the lenders’ plea to “maximise value” of debt-laden firm as the bids received were “sub-optimal and unsatisfactory”.
On March 2, the NCLAT overturned the National Company Law Tribunal’s order that had permitted holding a second e-auction. The appellate tribunal had also told the CoC to take steps for further negotiations with resolution applicants as per the relevant clauses of the resolution plan. The order enabled the CoC to negotiate and call for higher bids.
In February, NCLT’s Mumbai bench had declared the proposed second e-auction as a violation of bankruptcy rules. Further, the bankruptcy court had also termed Torrent Group as the highest bidder under the first challenge mechanism and directed the administrator to take the process to its “logical conclusion”.