SC seeks responses to Videocon ex-promoters' pleas on bankruptcy law

The Supreme Court on Friday sought responses from the government and State Bank of India (SBI) on a couple of appeals filed by former promoters of bankrupt Videocon Industries including its former chairman Venugopal Dhoot.

Dhoot challenged the various provisions of the bankruptcy law that allowed lenders to initiate insolvency proceedings against personal guarantors like him without giving them the opportunity to present their stand.

A bench led by Chief Justice DY Chandrachud issued notice to the ministries of corporate affairs and law and SBI, posting the matter for further hearing next week, along with a batch of around 100 similar appeals including Surendra B Jiwrajka versus Omkara Assets Reconstruction.


The ex-promoters of various other bankrupt companies undergoing insolvency proceedings before the National Company Law Tribunal (NCLT) have also challenged various provisions of the Insolvency and Bankruptcy Code (IBC).

Separately, Dhoot in another appeal to the top court has sought a direction to the committee of creditors of Videocon to consider his resolution plan that entails a "zero haircut" (involving no loss to the banks/creditors) and do away with lenders' approval for Vedanta Group company Twinstar Technologies' proposal to acquire bankrupt Videocon Industries for ₹2,962 crore. Dhoot had last year submitted his resolution plan to repay ₹31,789 crore, but the proposal was rejected by lenders.

Twinstar has filed a cross-appeal challenging an order of the National Company Law Appellate Tribunal that set aside its ₹2,692-crore bid with a 95% haircut against total admitted claims of ₹64,637.6 crore for 13 group companies of the debt-ridden Videocon group. These appeals will also be taken up for hearing next month.