New Delhi, Mar 4 (IANS): Bank of Baroda (BoB), the lead lender of Reliance Home Finance Limited representing 34 banks and institutions has dragged SP Group to Delhi High Court.
BoB alleges that SP Group has refused to join the resolution process and is stalling the resolution process and also not cooperating with other lenders.
BoB has filed an application before the Delhi High Court on March 3, 2021.
In its petition, Bank of Baroda said that in the hearing held on October 1, 2020, the applicant has made an offer that it is willing to secure the principal amount payable to the petitioner by investing a sum of Rs 200 crore in a fixed deposit receipt, which amount could be released in accordance with the final resolution plan.
"Yet the petitioner remained persistent in its unreasonable stance and refused to accept the offer," Bank of Baroda said.
"As a matter of law, in grant of interim order (or for continuing it), the Court ought to take into account the public interest and the likelihood of injury to the other stakeholders. It is submitted that if the restraint order is continued in the present case, the assets of Respondent No 1, will be dissipated, and its resolution process will be unfruitful and futile. Further, the petitioner has not been successful in commencing arbitration proceedings and it is unlikely that it will commence and conclude within reasonable future," the petition said.
"It is submitted that since August 31, 2020, the captioned matter has been listed before this Hon'ble Court on 8 dates. However, the application filed by by the respondent seeking modification of the interim orders passed by this Hon'ble Court has not been decided," the petition said.
"It is pertinent to note that the applicant has on several occasions submitted before this Hon'ble Court that there is an urgency in the matter as the resolution process was underway. The applicant has prayed that this Hon'ble Court may pass an order directing/clarifying that the resolution process will continue in the meanwhile. However, no such order has been passed till date," the petition added.
The petition has submitted that the Court ought to pass an order vacating the restraint order dated November 20, 2019.
The case was posted for hearing today before Delhi High Court and has now been adjourned to March 10, 2021.
The lenders of RHFL are unable to proceed with the resolution process due to a coercive stay obtained by the SP Group from the Delhi High Court in November 2019.
As per the stay order, RHFL is prohibited from disposing, alienating, encumbering either directly or indirectly or otherwise part with the possession of any of its assets, thus directly impacting the ongoing debt resolution process.
SP Group is a secured lender with just Rs 200 crore exposure out of a total debt of Rs 11,200 crore, i.e., less than 1.8 per cent of the total debt of RHF.
RHFL's lenders have received four binding bids. Two of the bids, from ACRE and Authum Investments, are for all the assets of the company, while the other two bids, from Capri Global and Avenue-Arcil, are for only the retail assets of the company.
The bids are considered to be extremely attractive to the lenders as their values have crossed the fair value as determined by two independent valuers appointed by the lenders.
However, the lenders are unable to proceed with the resolution due to the stay obtained by the SP Group.
As the lenders hope to finalise the successful bidder for RHFL's assets in the next couple of week.
However the same can be done only if the stay obtained by the SP Group is vacated.
In August last year, lenders led by Bank of Baroda had invited expressions of interest for the assets of Reliance Home Finance and Reliance Commercial Finance, both arms of Reliance Capital
The resolution process is being managed by BoBCapital Markets (BoB Caps) and Ernst & Young (EY).