BoI contests maintainability of Amazon’s intervention plea in FRL case

Bank of India, which has moved an insolvency petition against under Section 7 of the (IBC), is contesting the maintainability of US based e-commerce giant Amazon’s intervention application, saying it was a stalling tactic adopted by the e-commerce giant to delay the admission of the petition.

The Mumbai bench of National Company Law Tribunal (NCLT) will first decide on the maintainability of Amazon’s intervention application and then proceed with the larger matter of admitting the Section 7 petition against ,

The matter has been adjourned to June 10. The dedicated bankruptcy tribunal has asked to file a reply to the intervention application moved by Amazon in the meantime, to which the lender has said it will file a reply without any prejudice. The bench was presided over by Justice Pradeep Narhari Deshmukh and Kapal Kumar Vohra.

Ravi Kadam, appearing on behalf of Bank of India, said Amazon’s intervention application has nothing to do with Section 7 of IBC and they are just trying to delay the admission of the insolvency petition against ,

“Generally, only parties involved in the litigations are heard by the courts or tribunal and only in exceptional circumstances a third party is allowed to intervene. In this case, only the applicant creditor and the debtor are the relevant parties, hence they will be heard. The issue of intervention by third parties has been considered on several occasions by both NCLT and NCLAT, and they have held that at the time of admission, only parties involved in proceedings are to be heard in insolvency pleas,” said Ashish Pyasi, Associate Partner , Dhir and Dhir Associates. “As a shareholder, you don’t have much of a say after the petition is admitted in these kinds of proceedings,” he said.

Amazon moved an intervention application under Section 65 of the IBC in the matter, alleging that lenders have colluded with the corporate debtor, Future Retail, to deny them their rights in the case. Hence the insolvency petition under Section 7 of IBC should not be admitted. The e-commerce giant has also written to the Reserve (RBI) alleging collusion by Future Retail and banks. In the letter it has said Future Retail should not be allowed to go into bankruptcy proceedings as that would impact its rights further.

In the last hearing, Future Retail was given more time to file its reply to the insolvency petition moved by against the company, even as the bank was seeking an admission of the insolvency petition and consequently appointment of an interim profession resolution. Future Retail has now filed its reply in the matter, it informed the bench on Monday.

Future owes over Rs 15,000 crore to its 26 lenders. Future Group, in 2020, had decided to engage in a slump sale of its unlisted and listed to Reliance Retail for a consideration of about Rs 25,000 crore to address its ballooning debt. However, Amazon, which had acquired 49 per cent in Future Coupons in 2019 that owns 10 per cent in Future Retail, accused Future Retail of breach of contract for its agreement with Reliance Retail. Recently, in a regulatory filing, Reliance Industries had informed that the deal with Future Retail will not fructify as the company’s secured creditors had voted against the scheme.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard,

Digital Editor

Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button