NCLT adjourns RCap hearing till Jan 16

The NCLT on Thursday adjourned the hearing for Reliance Capital, asking the administrator and committee of creditors (CoC) to respond to Torrent Investments’ plea by January 16.

Torrent Investments had filed a plea seeking a stay on the second round of auction for resolution of Reliance Capital, deeming it illegal and going against the sanctity of IBC.

NCLT said the interim orders will remain in force till the next hearing on January 16. The CoC and administrator submitted that the second round of the auction will not be held prior to the next hearing. The second auction was also scheduled to be held on January 16.

Senior advocate Darius Khambata, on behalf of Torrent Investments, said that the auction mechanism was chosen and held at the behest of the CoC on December 21. The decision to opt for a second auction is a “brazen attempt” to nullify the first auction and will delay the resolution process.

Also representing Torrent Investments, Mukul Rohatgi, said that extension of the ‘Challenge Mechanism’ is not permissible as the highest bidder was already declared post the first round.

Appearing for the CoC, senior advocate Kapil Sibal said that the second auction is being proposed for value maximisation given the fact that the original Request for Resolution Plan (RFRP) provided for the administrator and CoC to modify and revise the modalities or terms of the auction. Later, he sought time till Monday to respond to Torrent’s arguments.

Senior advocates Abhishek Manu Singhvi represented Hinduja Group and Ravi Kadam represented the administrator of RCap.

Torrent Investments had emerged as the highest bidder in a challenging process conducted on December 21, with a bid NPV (net present value) of ₹8,640 crore, whereas the only other bidder, Hinduja Group, had submitted a bid NPV of ₹8,110 crore. However, a day later, the latter submitted a revised bid with an NPV of ₹8,950 crore.

Torrent Investments dragged the RCap administrator and CoC to the NCLT, where the tribunal granted an interim stay, barring the CoC from considering Hinduja’s revised bid.

In turn, the CoC of Reliance Capital voted in favour of conducting a second round of auction saying that the bids submitted so far have been sub-optimal. The threshold for the second auction was envisaged to be set at an NPV of ₹9,500 crore, as per reports.

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