NCLAT notice to IIHL on CoC plea seeking interest

PTI, New Delhi: The NCLAT on Friday issued a notice to IndusInd International Holdings Ltd (IIHL) over a plea filed by lenders of Reliance Capital (RCap) seeking interest on payment for the extended period for the upfront payment by the Hinduja group firm and forfeiture of Rs 2,750 crore in case of default. A three-member bench led by Chairperson Justice Ashok Bhushan directed the Hinduja Group firm, IIHL to file a reply within two weeks and directed to list the matter on September 30 for the next hearing.

The National Company Law Appellate Tribunal (NCLAT) direction came while hearing a petition from the Committee of Creditors (CoC) of RCap, currently going through the Corporate Insolvency Resolution Process (CIRP). The lenders are seeking modificiation of the order passed by the Mumbai bench of the National Company Law Tribunal, which had on July 23, extended the period for implementation of the resolution plan till August 8, 2024. In their petition, the lenders have requested NCLAT to modify the order of NCLT and "allow interest on the upfront cash amount till August 8, 2024" by IIHL and also t o "allow interest on debt component of up-front cash amount from August 8, 2024, till transfer date which is the date of payment of upfront cash amount" of Rs 9,660 crore. The lenders have also sought permission for "forfeiture of monies lying in CoC designated account (Rs 2,750 crore) upon the occurrence of an event of default".

Mauritius-based IIHL emerged as the successful bidder for the acquisition of RCap. NCLT-Mumbai on February 27, 2024, approved IIHL's Rs 9,861-crore resolution plan for the debt-ridden financial firm. As per the deadline, IIHL was to pay Rs 2,750 crore in two escrow accounts by July 31 as per the approved plan. However, IIHL sought extension in the deadline, which was allowed by NCLT by modification. It directed to deposit the amount by August 10. During the proceedings of NCLAT, counsel appearing for lenders submitted that modification in terms and conditions was like "unwinding of transaction".