New Delhi, Mar 20(FN Bureau) Big setback for Torrent, as the Supreme Court, in its order on Monday, refused to stay the NCLAT order allowing a petition by lenders of Reliance Capital for another round of auction for the debt-ridden firm undergoing the insolvency process. The Top Court in its order today refused to restrain lenders from initiating round 2 of bidding to attract fresh bidders. The Supreme court today also issued notice on the plea of Torrent and permitted both the parties to take part in the second round of auction. The Apex court also made it clear that the outcome of the auction will be subject to what is decided in the case. The case will be heard in August 2023. “We are not inclined to pass any order,” the Apex Court of today said in its order.While refusing to stay the NCLAT order, the Supreme Court allowed the lenders to proceed with the second round of auction process to maximise the value.A two-member NCLAT bench had earlier set aside an order passed by the NCLT and said that the Committee of Creditors (CoC) has the power to negotiate for a higher bid.
Torrent had then filed a petition in the Supreme Court on March 07, challenging the order of the NCLAT, allowing round 2 of bidding. Torrent in its petition filed before the Supreme Court claimed that irreversible harm would be done, if lenders were allowed to conduct second round of auctions, and thereby sought stay on he NCLAT order.Torrent had emerged as the highest bidder with an upfront payment Rs 8,640 Crores. Hinduja Group submitted a higher bid of Rs 8,950 Crores, after the deadline.Torrent Group, a bidder of bankrupt firm Reliance Capital (RCap), had on March 07, moved the Supreme Court against the National Company Law Appellate Tribunal’s (NCLAT’s) order to hold a second round of auction for RCap assets.
The lenders had approached the NCLAT against an earlier order of the National Company Law Tribunal (NCLT) restraining the CoC from extending the auction round to find higher value for the company. The NCLAT in its order had allowed another round of bidding for the bankrupt firm Reliance Capital. Also in its order the NCLAT said that the CoC has the power to negotiate and invite for a higher bid. The NCLAT passed the order after hearing a petition filed by Vistra ITCL (India), one of the lenders of Anil Ambani promoted RCap, challenging an order of NCLT which restricted further auction of the bankrupt firm. Torrent had moved the court challenging to stop the second round of auction after its offer of Rs 8,640 crore emerged as the highest bid for the company. The Hindujas made an offer of Rs 9,000 crore after the auction closed.