New Delhi, March 20,2023: The Supreme Court on Monday declined to stay the National Company Law Appellate Tribunal’s (NCLAT) order to hold a second round of auction for RCap assets.

A bench comprising Justices Sanjiv Khanna M.M. Sundresh declined to entertain Torrent’s contention seeking stay on the NCLAT order and issued notice on its plea and fixed the matter for further hearing in August. The apex court came on the plea filed by the Torrent group, a bidder of bankrupt firm Reliance Capital (RCap), challenging the NCLAT.

Senior advocate Mukul Rohatgi, representing Torrent Investments Private Limited, vehemently argued before the bench, could there be a bid every month? The bench said it will examine the matter.

Rohatgi said in the first round, two parties made a bid and it was a structured bid and it was told to his client that their bid was final. He further argued during the bidding the other party stopped and his client went higher and was asked to come forward, but “overnight the man has a different idea and he wants to restart”. The second-round auction, which was scheduled Monday, did not take place.

Rohatgi said, “If there is no stay, today was the deadline…if they start a second bid then if I don’t participate and that bid is final then they will say you are out. If I participate in that bid then this is infructuous…why should it not await two weeks and your lordships may decide. How can somebody get another bite at the same cherry… ”

Rohatgi further added that the resolution professional (RP) told his client that their bid is final and sought the plan, and they have given it. After hearing submissions, the bench said, “Issue notice returnable in the month of August. In the meanwhile, the parties will participate in the process in terms of the impugned judgment, without prejudice to rights and contentions…reply, if any, may be filed in six weeks…”

Earlier this month, the NCLAT order came on a petition filed by Vistra ITCL (India), which is one of the lenders of Reliance Capital, against NCLT order restricting further auction of the bankrupt firm.

Following the NCLAT order, the lenders’ of RCap had decided to hold the second round of e-auction on March 20.

Torrent, after the first auction, was the highest bidder with a bid of Rs 8,640 crore for Reliance Capital. The CoC of Reliance Capital, opted for a second auction after Hinduja group made an offer of Rs 9,000 crore. Torrent challenged this before the Mumbai bench of NCLT (National Company Law Tribunal).

In February, NCLT held that the challenge mechanism for financial bids was concluded as on December 21, 2022, with the bid of Torrent Investments at Rs 8,640 crore being the highest. This order was challenged by the CoC of RCap in NCLAT.

Vistra ITCL (India), one of the lenders of Reliance Capital, had moved NCLAT challenging an order of NCLT which restricted further auction of the bankrupt firm.

RCap was sent for debt resolution in November 2021 after the company defaulted on loans worth Rs 24,000 crore.

The apex court has allowed the lenders to proceed with the second round of the action to maximize value. The Committee of Creditors (CoC) had decided to conduct a second round of auction, post Hinduja bid.