NCLT allows Future Retail time to file a response to Bank of India’s insolvency plea

The dedicated bankruptcy court on Thursday allowed the Kishore Biyani promoted Future Retail Ltd (FRL) time to file its response to a plea filed by the state-owned Bank of India under the Insolvency & Bankruptcy Code (IBC).

The Mumbai bench of the National Company Law Tribunal (NCLT) was hearing a petition filed by the lender to admit the BSE-listed Future Retail under the Corporate Insolvency Resolution Process (CIRP).

The bench led by Justice PN Deshmukh and Shyam Babu Gautam, while allowing time for the company to file a response, adjourned the case for further hearing to May 12.


Before that, Ravi Kadam senior advocate appearing for the lender, argued that since the vacation is approaching, the tribunal should allow the lender one hearing before that.

The state-owned lender initiated a resolution process against Future Retail following the Rs 3,495 crore default on the one-time restructuring scheme between the bank and the company.

“As the company was present, an opportunity is granted to the company to file its reply so that it can defend it,” said Ashish Pyasi, Associate Partner of law firm Dhir & Dhir Associate. “After hearing the parties on the next date, in the event petition is complete in all aspects and there is a debt and default, then NCLT will initiate the proceedings.”

In a regulatory filing to the stock exchanges last week, FRL said 69% of lenders voted against the plan while 30% supported it. As much as 83% of the secured creditors of Future Lifestyle Fashion, the group’s second-largest listed entity, also rejected the proposed sell-off to Reliance.

Lenders have dues of over Rs 17500 crore, which includes Rs 3700 crore offshore bonds and Rs 13800 crore borrowing from local banks. The company’s assets include 620 stores, among them 30 Big Bazaar hypermarkets and 350 smaller-format outlets.

In 2020, Future Group had decided to combine its two-dozen listed and unlisted companies and sell them on a slump sale basis to rival Reliance Retail for about Rs 25,000 crore as debt ballooned.

The Amazon-Future dispute stems from a 2019 investment by the US giant to acquire a 49% in promoter firm Future Coupons Pvt Ltd (FCPL), which owned about 10% of FRL. The US e-commerce major has accused Future Group of breach of contract by agreeing to sell its assets to Reliance, which it said was not allowed under the 2019 investment agreements.

Reliance had taken possession of 835 stores as outstanding rentals had accumulated to about Rs 4,800 crore.

Amazon and the Future Group have filed petitions and counterpetitions over the deal in multiple legal forums. Amazon claims that the terms of its 2019 investment in a Future Retail promoter firm gave it the first right of refusal in any stake sale in the Indian retailer and barred it from selling a stake to Reliance entities.