The Supreme Court on Monday declined to grant a stay on the order passed by the National Company Law Appellate Tribunal in Reliance Capital Ltd.'s insolvency case.
The top court has also allowed the parties to go ahead and participate in the process as directed in the NCLAT order without prejudice to their rights and contentions. This means that the creditors' committee can go ahead with the extended auction plan.
The apex court will hear the matter next in August.
Earlier this month, the National Company Law Appellate Tribunal had allowed another round of auction for the debt-ridden Reliance Capital, thereby allowing the Committee of Creditors' stance of an extended round of auctions.
The tribunal held that the CoC is fully empowered to further negotiate with one or more resolution applicants, even after completion of the Challenge Mechanism.
Additionally, the tribunal highlighted that even if Torrent Investments' plan—consequent to Challenge Mechanism held on Dec. 21, 2022—was highest in value, it has no right to insist that the plan should be put to vote by CoC.
The case reached the NCLAT after the National Company Law Tribunal had stopped the CoC's plan for an "extended round of auctions". It had allowed Torrent Investments' plea, holding it the highest bidder in the auction process.
The bidding process for Reliance Capital concluded on Dec. 21, 2022, with Torrent emerging as the highest bidder with Rs 8,640 crore.
However, a day after the e-auction, Hinduja Group—the promoter of IndusInd Bank Ltd.—had revised its offer from Rs 8,110 crore to Rs 9,000 crore. This prompted Torrent to approach the NCLT for a direction to the administrator to not place Hinduja Group's non-compliant plan before the CoC.
On Jan. 4, the NCLT had given Torrent this relief. The CoC, however, was of the view that it was entitled to call an offer sub-optimal and had every right to negotiate or renegotiate the proposals in order to maximise value.
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