PremiumTorrent, which emerged as the top bidder in the auction process with an offer of ₹8,640 crore for Reliance Capital, approached the bankruptcy court to restrain lenders from considering Hinduja’s upgraded offer of ₹9,000 crore, arguing that accepting late offers violated the norms for the insolvency resolution process
Torrent Investments, one of the final bidders for insolvent Reliance Capital, on Thursday argued before the National Company Law Tribunal that the second auction proposed by the Committee of Creditors (CoC) to be held on 19 January, is a “brazen" attempt to nullify the tribunal’s earlier order by starting an extended second challenge mechanism.
Torrent, which emerged as the top bidder in the auction process with an offer of ₹8,640 crore for Reliance Capital (RCap), approached the bankruptcy court to restrain lenders from considering Hinduja’s upgraded offer of ₹9,000 crore, arguing that accepting late offers violated the norms for the insolvency resolution process.
The CoC on Friday floated a proposal for the fresh second round of auction after receiving a revised bid from the Hinduja group. In its application before the NCLT, Torrent pleaded a stay on voting by the lenders in the second round. It however, could not get interim relief.
On 3 January, the NCLT in its order asked the lenders to not take up the bid offered by the Hinduja group till the next date of hearing, thereby granting interim relief to Torrent.
Senior counsel, Darius Khambata, representing Torrent, said after the CoC realized that a second challenge mechanism could not be initiated after the first challenge mechanism was over, hence, they termed it as an “extended challenge mechanism". “How can something be extended once it’s over? This is nothing but jumping off the first challenge mechanism and a completely new process has been started," Khambata argued.
Responding to Torrent’s arguments, Kapil Sibal, senior counsel on behalf of CoC, said that it had found that the bid submitted by Torrent was sub-optimal and that it was not eligible and compliant while also being below the threshold price.
Sibal also informed the NCLT that when the administrator wrote to Torrent, it submitted a fresh bid on 6 January and changed its entire bid. “This is shocking that Torrent did not inform the court of these facts," he said.
As CoC, Sibal argued that it was not obligated to approve the resolution plan which has the highest NPV or scored the highest as per the evaluation matrix.
A bench led by Justice Shyam Babu Gautam and Justice Pradeep Narhari Deshmukh sought replies to Torrent’s plea and posted the matter for further hearing on Monday.