The insolvency court should've heard the lenders of Reliance Home Finance Ltd. while deciding on the case involving debenture holders, the National Company Law Tribunal has said.
Lenders, with Bank of Baroda as the lead banker, who have signed the inter-creditor agreement will now be heard by the NCLT in the debenture redemption case.
RHFL went into insolvency in 2020. A year later, IDBI Trusteeship, representing mutual funds and pension funds, approached the NCLT for a direction to RHFL to redeem the debentures issued to them with interest. The tribunal directed RHFL to redeem these debentures, worth around Rs 2850 crore.
To be clear, the Supreme Court approved the resolution plan submitted by Authum Investment for RHFL last month. The apex court directed that dissenting debenture holders be given the option to accept the terms of the resolution plan. Alternatively, they can pursue other legal remedies to recover their dues.
Even as the insolvency process for RHFL has concluded, a small number of debenture holders have chosen to stand outside the insolvency process. While they won at the NCLT, it'll be some time before they are able to recover their dues. The appellate tribunal has now held that lenders who had signed the ICA should've had an opportunity to be heard by the NCLT.
The Mumbai bench of the NCLT has now been asked to hear the matter again and pass a reasoned order taking into account the arguments of the ICA lenders.
Pointing to the provision of the Companies Act, 2013, the NCLAT noted that the tribunal is supposed to hear 'interested' parties, which will include the company itself or any other person interested in the matter. "Since the ICA lenders have played an important role in the financial rejuvenation of the company, they should be given an opportunity to be heard".
NCLT Mumbai will hear the matter on May 16.
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