The National Company Law Tribunal (NCLT) on Wednesday asked the lenders to delay the second auction for Reliance Capital, which was scheduled for Thursday, till January 23 as it could not complete hearing arguments from both sides.
Torrent Investment, the winning bidder of the first round of auction of Anil Ambani-promoted Reliance Capital, had moved the NCLT Mumbai bench on January 12, seeking a stay on the lenders' proposal for 'challenge mechanism' that was scheduled for January 19.
The tribunal, led by Justice Shyam Babu Gautam and Justice Pradeep Narhari Deshmukh, extended the date of the 'challenge mechanism' to January 23, till the hearing of all parties are completed.
The hearing on the matter will continue on Thursday.
Ravi Kadam, representing the administrator, said the Committee of Creditors (CoC) has the right to call for new resolution plans.
"All the earlier bids are still valid, but the CoC wants to see if there are any better offers," he stated.
Kapil Sibal, representing the CoC, told the tribunal that even after the extension of 'challenge mechanism' or fresh auction, there still might not be any plan to put before the NCLT.
"The CoC is not obligated to approve a plan on the basis of high NPV. Maximization is part of the process and it is CoC's right to discuss it with resolution applicants," Sibal pointed out.
Reliance Capital has a consolidated debt of about Rs 40,000 crore.
The Reserve Bank of India (RBI) had applied to initiate Corporate Insolvency Resolution Process (CIRP) against the Reliance Group company at NCLT Mumbai bench.
Subsidiaries of Reliance Capital that are pushed for insolvency resolution are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance, and Reliance Commercial Finance.
RBI appointed Nageswara Rao Y as the administrator of Reliance Capital's insolvency process.