The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday granted more time to Future Retail Limited (FRL) to file its reply on Bank of India’s plea seeking insolvency resolution proceedings against the company for default on loans. Started was requested.
Bank of India, the lead banker of the consortium of lenders to the retailer, on April 14 filed a petition before the NCLT to initiate insolvency proceedings against FRL. The tribunal had given a week’s time to the FRL to file its reply in the matter. However, the company again sought time to file its reply, which was allowed by the tribunal.
Advocate Shyam Kapadia, representing FRL, told the court that the delay in filing the reply was because some of the directors and key employees of the company had quit and some of their terms had expired. He argued that there was no ‘urgency’ in the matter which required the right to file reply to be taken away. “Nothing significant will happen in a week,” Kapadia argued.
Opposing Kapadia’s request, Ravi Kadam, senior counsel for Bank of India, said there was an extreme need to appoint an interim resolution professional and allow the bank’s plea against the company under the Insolvency and Bankruptcy Code. He said FRL had earlier agreed to file its reply within a week.
Kadam informs the court that the company has huge debt 15,000 crore, which involves huge amount of public money.
He said that the resignation of key officers of the company was the reason for the speedy acceptance of the petition by the court.
Amazon filed an intervention application asking the court to make it a party to the case. The online retailer alleged that the banks colluded with FRL and deprived Amazon of its rights.
On May 10, in its letter to the Reserve Bank of India, the US e-commerce giant said that it is the duty of banks in India, in particular, of public sector banks, to ensure compliance with fiduciary duty to the public. However, the lending banks of FRL have acted completely irresponsibly and in collusion despite being aware of the illegal actions of FRL. Thus, the present letter is being issued requesting a forensic investigation of FRL and all its lending banks in relation to these collusive actions,” Amazon said.