The Supreme Court on Tuesday asked a consortium of banks to file an affidavit on a fresh petition of Future Retail Ltd. (FRL) seeking quashing of lenders' letters warning initiation of insolvency proceedings against it.
The bench of Chief Justice of India NV Ramana and Justices AS Bopanna and Hima Kohli asked the banks to file an affidavit and posted the matter for hearing on Thursday.
Kishore Biyani-led FRL in its plea 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 argued 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.
During the hearing, senior advocate Rakesh Dwivedi appearing for a consortium of 27 banks told the Bench that this writ petition is not maintainable at all and is arising out of a contractual deal between banks and Future group.
"FRL admits that they are bankrupt. It does not have any financial wherewithal. Article 32 plea is a testimony that they don't have the capacity to pay. If this is entertained then whenever someone is declared NPA they will file the writ. We have nothing to do with Amazon, Future, Reliance or arbitration award. We are not parties to the arbitration. Our loan was not given to the condition on any award," Dwivedi contended.
Hearing the case, the CJI asked Dwivedi to file a short affidavit and then it can pass an order after considering all issues.
Following that, Dwivedi said that he will file an affidavit but let there be no interim order by the court on the issue as default has taken place a month ago.
Senior advocate Harish Salve, appearing for FRL, while referring to the ongoing dispute with Amazon, argued that the Future group had to face 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 argued 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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