NCLT grants Future more time to respond to BOI plea
MUMBAI: The Mumbai bench of the National Company Law Tribunal (NCLT) Thursday granted more time to Future Retail Ltd (FRL) to file its response to a Bank of India petition seeking to initiate insolvency resolution proceedings against the company for defaulting on loans.
Bank of India, the lead banker of the consortium of lenders to FRL, filed the plea before the NCLT to initiate insolvency proceedings against it on April 14. The tribunal had granted a week to FRL to file its response. However, the firm again sought time to file its response, which the tribunal granted.
Shyam Kapadia, the counsel representing FRL, told the court that the delay in filing the reply was because some directors and key personnel of the company had stepped down, and some of their terms had expired. He argued that there was no ‘urgency’ that required the right to file a reply to be taken away. “Nothing significant will happen in a week,” Kapadia argued.
Opposing Kapadia’s request, Ravi Kadam, senior counsel for Bank of India, said there was an overwhelming need to appoint an interim resolution professional and admit the bank’s plea against the firm under the Insolvency and Bankruptcy Code. He added FRL had earlier agreed to file its reply within a week. Kadam informed the court that the company had a huge debt of over ₹15,000 crore, including a large amount of public money. He said that the stepping down of the company’s key officials was all the more reason for the plea to be expeditiously admitted by the court.
Amazon moved an intervention application asking the court to make it a party to the matter. The company alleged that banks colluded with FRL to obstruct and deny Amazon of its rights.
On May 10, in its letter to the RBI, the e-commerce giant said It is the duty of banks in India, more specifically, public sector banks, to ensure compliance with fiduciary duty towards the public. However, lender banks of FRL have acted in an irresponsible and collusive’ manner despite having knowledge of FRL’S illegal actions. Thus, it is requesting for a forensic investigation in the matter.