NCLT rejects Reliance Infra subsidiary's resolution plan

Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) has rejected the resolution plan for SU Toll Road Pvt Ltd, a wholly owned subsidiary of Reliance Infrastructure Ltd, observing that the successful resolution applicant's refusal to pay for overdue road repairs makes the plan unviable. The order follows an intervention plea filed by the NHAI. The company operates the 136-km Salem-Ulundurpet corridor in Tamil Nadu.

In its order, the tribunal rejected the resolution plan and gave the lenders 15 days to decide on the next course of action. It also clarified that if the lenders choose to invite fresh bids, the resolution process will be extended by 120 days from the date of that decision.

"It is noted that SRA (successful resolution applicant) neither sought any clarification regarding completion of MMR (major maintenance and repair) obligations prior to approval of the resolution plan, nor did it require RP (resolution professional) or CoC (committee of creditors) to clarify who shall bear the costs in relation thereto, even though completion of such work was necessary to carry on the corporate debtor's business further and to seek NHAI approval for change in management and ownership," the division bench of judicial member Sushil Mahadeorao Kochey and technical member Prabhat Kumar said in its November 3 order.