The Reserve Bank of India's appointed administrator, Nageswara Rao Y, argued that Hinduja Group's IndusInd International Holdings Ltd. should not receive an extra 90-day extension to implement its resolution plan for Reliance Capital Ltd. because it has not obtained the lenders' consent.
Rao's application against IndusInd International Holdings' attempt to extend the Resolution Plan is based on a number of arguments, including the inability to modify the Resolution Plan without the Committee of Creditors' consent, the completion of all precedent conditions, false grounds for extension, and the Monitoring Committee's refusal to agree to any extension.
The NCLT should not support this, as it goes against the code, the administrator said. The resolution plan was approved on May 15, 2024, and IIHL must follow its terms, including payment obligations, the administrator said.
It was further submitted that, according to the law, a submitted and approved resolution plan is binding. For an extension, IIHL must show it was ready to meet its obligations and was prevented by special circumstances. Despite over 12 months since CoC approval and 90 days since NCLT approval, IIHL has not implemented the plan or proven its financial ability. Requests from the respondents, RBI, and IRDAI for details on IIHL's funding sources have been ignored, Rao said.
Lastly, it was put forth before the tribunal that the plan does not allow phased implementation.
As reported earlier, in November 2021, the Reserve Bank took over Reliance Capital due to governance issues and payment defaults and appointed Nageswara Rao Y as the administrator, who invited bids in February 2022.
Reliance Capital had a debt of over Rs 40,000 crore. Four bids were initially submitted, but the creditors rejected them for being too low. A new bidding process included IIHL and Torrent Investments. On Feb. 27, the National Company Law Tribunal approved a Rs 9,650-crore plan to resolve Reliance Capital's debt, setting May 27 as the deadline for completion.
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