Setting aside an order passed by National Company Law Tribunal (NCLT), a two-member bench of the quasi-judicial National Company Law Appellate Tribunal (NCLAT) on Thursday allowed a petition filed by lenders of Reliance Capital (RCap) seeking another round of auction for the debt-ridden firm undergoing insolvency process.
The bench also said the Committee of Creditors (CoC) has the power to negotiate and call for a higher bid.
The NCLT also permitted the CoC to continue with the challenge mechanism and invite bids after two weeks.
The appellate tribunal's order came on a petition filed by Vistra ITCL (India), one of the lenders of Anil Ambani-promoted RCap, challenging an order of NCLT which restricted further auction of the bankrupt firm.
RCap has a consolidated debt of around ₹40,000 crore.
The RCap matter
In the RCap issue, Torrent Investments had emerged as the highest bidder with a resolution plan of ₹8,640 crore.
However, the CoC of RCap decided to conduct a second challenge mechanism and then Hinduja Group firm Indusind International Holdings Ltd (IIHL) put a revised bid.
This was challenged by Torrent Investments before the Mumbai bench of NCLT.
Earlier on 2 February, the NCLT said the challenge mechanism for financial bids stood concluded as on 21 December last year, with the bid of Torrent Investments at ₹8,640 crore being the highest.
Torrent Investments had filed a plea on 9 January, requesting the tribunal to quash the lenders' plan to hold a fresh auction for takeover of RCap. Then, IIHL also filed a petition challenging the NCLT order.
Torrent Investments was the highest bidder offering ₹8,640 crore in the last round of the '' challenge mechanism''.
IIHL has also challenged the NCLT order before the appellate tribunal.