Reliance Capital lenders withdraw plea against NCLT’s stay order


The secured creditors of Anil Ambani-promoted Reliance Capital on Wednesday withdrew a plea from the National Company Law Appellate Tribunal (NCLAT) challenging the NCLT’s order of maintaining a status quo on the debt resolution process at the distressed financier. The development came after the appellate tribunal observed that at this stage it is not inclined to hear the matter since the final order by NCLT is expected next week.

“The adjudicating authority having been already directed the application to be notified for pronouncement in the next week…we are of the view that at this stage we need not express any opinion on the merits because that has to be addressed by the adjudicating authority (NCLT) while deciding the application,” observed the bench led by Justice Ashok Bhushan and Barun Mitra in its two-page order.

Earlier, senior counsel Kapil Sibal, appearing for the lenders along with the law firm Luthra & Luthra Law Office, submitted that they may be permitted to withdraw the appeal, leaving all contentions open.

The appellate tribunal allowed the petition while observing that, “We accept the prayer and permit the appellant to withdraw the appeal without prejudice to any of the contention of either of the parties.”

On Tuesday, the committee of creditors (CoC) moved to the appellate tribunal, seeking to vacate a bankruptcy court order for maintaining the status quo on the company’s insolvency proceedings.

The CoC approached the appellate tribunal after the Mumbai bench of the National Company Law Tribunal (NCLT) stayed the second challenge mechanism for the sale of Reliance Capital.

Before that on Monday, NCLT’s Mumbai bench stayed the second round of the challenge mechanism proposed by the financial company’s administrator Nageswara Rao Y, while adding that it would pronounce an order in the week beginning January 30.Reliance Capital CoC will meet on Friday to review the progress on the sale of the company that provides financial services ranging from insurance to broking. In its petition at NCLAT, lenders had argued that the tribunal has “erred in not appreciating” the fact that the CoC, in the exercise of its commercial wisdom, has voted nearly unanimously for an extended round of challenge mechanism after considering the values discovered in the challenge mechanism on December 21, 2022.

The stay by NCLT was in response to an appeal filed by Torrent Investments opposing the second auction and the improved bids submitted by the Hinduja Group 24 hours after the first auction ended on December 21.

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