The National Company Law Tribunal (NCLT) on Thursday gave time till June 6 to Future Retail Ltd (FRL) to file its reply on the insolvency petition filed by Bank of India, which told the tribunal that any delay in initiating the resolution process could jeopardise recovery of money lent to the firm.
In April, Bank of India moved the tribunal seeking to initiate insolvency resolution proceedings against FRL, which has defaulted on loan repayments. During the hearing on Thursday, FRL’s counsel Shyam Kapadia sought more time for filing the reply on the insolvency petition due to difficulties following resignations of senior company officials.
Bank of India’s counsel Ravi Kadam apprised the tribunal about the urgency of the matter and said it was essential that an Interim Resolution Professional (IRP) takes immediate control of FRL. He also said that any further delays could jeopardise recovery of public money that several Indian banks had lent to the struggling retailer. Later, the Mumbai bench of the NCLT granted additional time till June 6 to FRL to file the reply on the petition. Meanwhile, Amazon opposed the insolvency application alleging that the banks had colluded with FRL and that any bankruptcy proceedings at this stage will compromise the e-commerce company’s rights.
Amazon filed an intervention application under Section 65 of the Insolvency and Bankruptcy Code before the NCLT. Section 65 deals with provisions relating to penalty for fraudulent or malicious initiation of proceedings. Kadam, during the hearing, also said that Bank of India was not concerned with the third party dispute at FRL.
Bank of India is the lead banker in the consortium of lenders of FRL. FRL has defaulted on payment of Rs 5,322.32 crore to its lenders on account of the ongoing litigations with e-commerce major Amazon and other related issues. Earlier this month, FRL Managing Director Rakesh Biyani stepped down while officials, including the Company Secretary of the debt-ridden firm have tendered their resignations.
There is an exodus of people from the board and at other levels in several Future group companies after the proposed Rs 24,713 crore-deal with Reliance Retail was called off. In March, Bank of India through a public notice claimed its charge over the assets of FRL and warned the public against dealing with assets of the Kishore Biyani-led Future group firm. Future Group’s deal with Reliance was opposed by Amazon and litigation is going on at various forums.