The Committee of Creditors of Reliance Capital has filed an application with the National Company Law Appellate Tribunal (NCLAT) seeking a direction to levy an interest charge of ₹400 crore on Hindujas-onwed IndusInd International Holdings for delaying the execution of the NCLT-approved Corporate Insolvency Resolution Process.

Further, the CoC insisted that IIHL should not be given any extension for closing the CIRP. If there are any more delay, IIHL should be made to forfeit the deposit of ₹2,750 crore made in the escrow account.

Interest payment

Justifying its claim, CoC said the country’s largest insurance company LIC had invested in certain bonds of Reliance Capital at an interest rate 16.65 per cent per annum. Using the same yardstick, IIHL should pay ₹400 crore as interest for the delay from May 27, as the funds would have otherwise been deployed by the lenders to earn an income.

On the other hand, by delaying the CIRP implementation, IIHL would have saved on interest payment on a debt of ₹7,300 crore. The interest on this amount would have kicked in from May 27, said the CoC application.

Moreover, IIHL has gained returns on the equity infusion of ₹2,750 crore till August 8 due to delay in depositing the money in CoC operated escrow account.

The CoC has suffered huge losses of about ₹400 crore, assuming the return LIC would have earned on recovering the money through CIRP. Incidentally, the financing costs and Internal Rate of Return of IIHL is also similar region, said the CoC application.

While IIHL has saved on its cost, lenders have lost out due to extension sought by the company and in order to compensate lenders NCLAT should direct the company to pay ₹400 crore as cost of extension of the case.

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