NCLT asks all parties to maintain status quo in Reliance Capital auction

The Mumbai Bench of the National Company Law Tribunal (NCLT) on Friday directed all the parties to maintain a status quo in the auction process of Anil Ambani-promoted distressed financier Reliance Capital.

This includes deferring the proposed auction for sale of Reliance Capital scheduled on Monday (January 23). The tribunal will likely pronounce its order next week on the Torrent plea challenging second auction and a late improved offer from the Hinduja group entity.

"The counsel for the committee of creditors (CoC) on instruction expressed unwillingness to extend the statement made on January 18 about the further procedure to be kept on hold," said the division bench comprising Justice PN Deshmukh and technical member Shyam Babu Gautam in an oral order. "The applicant seeks to file a response, liberty is given to all the parties to submit their written submission, and till that time, we direct the parties to maintain a status quo." Before the tribunal's direction, senior advocate Darius Khambata, appearing for the Gujarat-based Torrent group, argued that the law mandates non-compliant plans can't be put to the CoC.


While countering this, the CoC senior advocate Kapil Sibal argued that current plans are suboptimal and the tribunal should not pass any order in this application of Torrent.

"By applicant's submission, CoC has a right to reissue the RFP or reject or liquidate but not to run a further challenge to discover the best price. So, Rs 25,000 crore public money is stuck in technicalities with the mounting interest of Rs 45 crore a week," said Sibal.