The Committee of Creditors (CoC) of Reliance Capital (RCap) on Thursday filed a fresh application before the Delhi bench of National Company Law Appellate Tribunal (NCLAT) seeking forfeiture of IndusInd International Holdings Ltd’s equity component of ₹2,750 crore in case of default by the Hinduja Group-owned company.
A copy of the petition has been seen by Mint.
In essence, the lenders are seeking modification of the NCLT order of 23 July that allowed IIHL to take over the insolvent Reliance Capital for ₹9,861 crore. The lenders have since been at odds with the Hinduja Group over the implementation of the resolution plan.
The lenders have sought from IIHL payment of interest on the debt component of ₹7,300 crore from August 2023 till the actual date of the payment, according to the plea filed before the appeals forum.
IIHL was to deposit the initial equity amount of ₹250 crore in a domestic escrow account and ₹2,500 crore in an offshore escrow account of the CoC by 31 July, under the approved plan. Subsequently, just as the deadline was nearing, IIHL filed an interlocutory application before the NCLT, seeking modification of the tribunal’s order. In this regard, the administrator has opposed granting any relief to IIHL.
NCLT, however, had partly granted IIHL an extension till 10 August for implementation of the resolution plan.
The forfeiture of funds, experts said, was appealed to secure the interest of the lenders and protect them from further losses which would accrue due to IIHL’s delay in implementing the NCLT-approved resolution plan.
Earlier too, in the NCLT, the CoC pleaded that they have been deprived of the timely payout of funds owed to them by the corporate debtor under the resolution plan. The resolution plan binds IIHL to pay the lenders within 90 days from the date of the order.
“In the event IIHL fails to make the payments within this period and defaults, then it is liable to pay interest to the CoC for the delayed payment and should also be asked to put monies in escrow account which will be forfeited if there are further delays in implementation of the resolution plan,” the 31-page petition showed.
‘Significant amount of public funds involved’
The petition further states significant amount of public funds are involved in this case as a huge amount of debt is owed to pension funds, retail bond holders, insurers including the Life Insurance Corp., Employees’ Provident Fund Organisation, and Army welfare fund, etc. Therefore, it is imperative that the resolution plan is successfully implemented in a time-bound manner, one of the key objectives of resolution under IBC.