NEW DELHI: In a big relief for Reliance Capital, the National Company Law Appellate Tribunal (NCLAT) on Thursday allowed a petition filed by the lenders of Anil Ambani-promoted Reliance Capital (RCap) to hold another round of auction for sale of the company under the Insolvency and Bankruptcy Code (IBC).
A two-member bench overturned an order passed by the National Company Law Tribunal (NCLT) on February 2, which declared the extended challenge round proposed by RCap lenders illegal and said the Committee of Creditors (CoC) has the power to negotiate and hold another round of auctions.
“We, thus conclude that even after completion of Challenge Mechanism under Regulation 39(1A)(b), the CoC retains its jurisdiction to negotiate with one or other resolution applicants, or to annul the resolution process and embark on to re-issue RFRP (Request for Resolution Plan),” said NCLAT.
“The CoC may proceed to fix a date after two weeks for holding a Revised Challenge Mechanism or/and to take any steps for further negotiations with the resolution applicants as per the relevant clauses of the RFRP,” it added.
The NCLAT order came on a petition filed by Vistra ITCL (India), one of the lenders of RCap, challenging an order of NCLT, which restricted further auction of the bankrupt firm. In the ongoing RCap insolvency proceedings, Torrent Investments had emerged as the highest bidder with a resolution plan of `8,640 crore.