The extended challenge mechanism for the resolution of Reliance Capital is likely to be derailed again as the Supreme Court, on Monday, asked the Committee of Creditors (CoC) to not take any action till March 20 when the apex court will next hear the case.
Mukul Rohatgi and Shyam Diwan represented Torrent Investments, whereas Pooja Dhar represented the CoC. Torrent Investments had, on March 4, appealed in the apex court against the National Company Law Appellate Tribunal’s March 2 order, where it allowed the CoC to go ahead with the second auction.
Following this, the CoC, on March 6, issued a notice proposing the hold the extended challenge mechanism on March 20. The CoC set the threshold bid amount at ₹9,500 crore on a net present value basis, higher than the highest bid of ₹ 8,640 crore submitted by Torrent in the first auction.
The CoC is likely meet this week to discuss and finalise the next course of action, sources told businessline.
In its plea, Torrent Investments said NCLAT “erroneously concluded that even after conclusion of the challenge mechanism, the CoC is empowered to negotiate further with one or other resolution applicants or annul the resolution process and re-issue the request for RFRP”.
This ignores the IBC mandate to conduct the insolvency process in a time-bound manner, arguments to which regard were not entertained by the NCLAT, as per the appeal accessed by businessline.
“Such an interpretation not only allows the specific mischief sought to be remedied by the legislature but also completely ignores the fact that the CIR process is a linear and sequential process,” it said.
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Torrent further said the point of contention under Regulation 39(1A) is not the CoC’s right to continue negotiations, but to ensure timely resolution through the mandate to conduct a single challenge mechanism or making a single modification to the resolution plan.