Reliance Capital lenders asked to reply on Torrent plea by January 16

MUMBAI:  In an action-packed day filled with arguments and counter-arguments, the National Company Law Tribunal (NCLT) on Thursday asked administrator and lenders of Reliance Capital (RCap) to file a reply by January 16 on Torrent Investments’ plea to stop the second round of auction.

Torrent Group entity, earlier this week filed a plea in the NCLT to stop lenders from holding a second round of ‘challenge mechanism’ or e-auction in the Reliance Capital insolvency case. Representing Torrent, senior counsel Mukul Rohatgi said that holding the new round of auction will be a violation of the law. “There cannot be another round again and again; otherwise there is no sanctity to the process,” he said. 

“The extension of ‘challenge mechanism’ is not permissible,” he added. He said that their bid of `8,640 crore was above the threshold and the matter ended there. Darius Khambata, representing Torrent Investments, stated that this whole process is unfair and the Rs 8,640 crore bid was in compliance with the challenge mechanism.

Senior counsel Kapil Sibal, who represented the lenders, said challenge mechanisms don’t confer any rights on any resolution applicant, including the resolution applicant with the highest net present value (NPV). The Committee of Creditors (CoC) is not obligated to approve the resolution plan which has the highest NPV or scored the highest as per the evaluation matrix, he added.

Sibal said Hinduja is offering Rs 1,000 crore more than Torrent. “How can lenders including LIC and EPFO be denied that money,” he added.