SC refuses to pass interim order to restrain lenders from declaring Future Retails as NPA

The Supreme Court on Thursday refused to pass any interim order on a petition of Future Retail Limited (FRL) seeking quashing of lenders' letters warning initiation of insolvency proceedings against it.

A bench of Chief Justice of India NV Ramana and Justice AS Bopanna and Hima Kohli adjourned the petition filed by FRL without passing any interim order against the banks.

During the hearing today, senior advocate Rakesh Dwivedi, appearing for a consortium of 27 banks told the Bench that the writ petition of FRL is not maintainable at all and is arising out of a contractual deal between banks and future groups.

"Ordinarily this court does not interfere in these cases of contracts. These are private banks with private contracts," Dwivedi said while adding that the loans have no linkage with the litigations between Future, Amazon and Reliance.

He also suggested that the entire assets of FRL can be subjected to open bids by Amazon and Reliance, with a reserve price of Rs 17,000 crores. Sealed bids can be submitted before the Supreme Court and whoever bids high, can them take, Dwivedi further added. "This is a sure shot, we will get our money, and whoever bids high will get Future", he further told the bench.

When Dwivedi sought a clarification from the bench if banks can take coercive action, the CJI bench said it is not passing any interim order and adjourned the case.

On February 1, the apex court had asked a consortium of banks to file an affidavit on a plea of FRL.

In its plea before the top court, Kishore Biyani-led FRL cited its dispute with US-based e-commerce giant Amazon.com. which has stalled its Rs 24,713 crore retail asset sale to Reliance Retail, and has sought a restraint on lenders from declaring it as a non-performing asset (NPA).

It also sought direction to set aside the three-event of default notices by lenders, more time for loan payment and requested the top court to "extend the timeline stipulated under the Framework Agreement for monetization of the small format stores."

The plea has cited its live deal with Reliance Retail for the sale of assets for nearly Rs 25,000 crore, which it said is virtually stalled because of litigations initiated by Amazon.

It said that since the deal with Reliance Retail has been stalled because of events beyond its control it had not been able to monetise its 'small-format stores' and other assets.

On the earlier hearing, senior advocate Harish Salve appearing for FRL, while referring to the ongoing dispute with Amazon, argued that the Future group was faced with various injunctions orders and it could not materialize its assets for making payments to the consortium of banks as per the one-time settlement agreements.

Salve said that the company needed some time and if the deal with Reliance goes through, all debts could be cleared.

Earlier this month, FRL had said it had missed the due date for the payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon, which has impacted its monetisation plans.

After it missed the due date i.e. December 31, 2021, FRL got a review period of 30 days (from the due date) in terms of the RBI circular of August 6, 2020, on a one-time restructuring (OTR) scheme for COVID-19 hit companies.

In 2021, FRL had entered into an OTR scheme for COVID-19 hit companies with a consortium of banks and lenders and was to discharge "an aggregate amount of Rs 3,494.56 crore" on or before December 31, 2021, for that.

( With inputs from ANI )

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