# In the matter of Reliance Capital Limited IA No. 1,99 & 150-MB-C-i-2023 in CP (IB) No. 1231-MB-C-I-2021

> NCLT judgment dated 2023-02-02. Citation: TCN-2023-NCLT-04818. The case involves a dispute during the Corporate Insolvency Resolution Process (CIRP) of…

- **Court:** NCLT
- **Order date:** 2 Feb 2023
- **Citation:** TCN-2023-NCLT-04818
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliance-capital-limited-ia-no-199-150-mb-c-i-2023-in-cp-ib-no-1231-mb-c-i-2021-eb21816c

## Summary

### Background

The case involves a dispute during the Corporate Insolvency Resolution Process (CIRP) of Reliance Capital Limited. Torrent Investments Pvt. Ltd. filed an application challenging the Committee of Creditors' (CoC) decision to conduct an extended challenge mechanism after the initial challenge mechanism had concluded. Torrent claimed that the CoC's decision violated Regulation 39(1A) of the CIRP Regulations and sought a declaration that the initial challenge mechanism concluded on 21.12.2022 with Torrent's bid of INR 8,640 Crores as the highest financial bid. The administrator initiated the CIRP, inviting resolution plans. A challenge mechanism was conducted to maximize asset value, with Torrent emerging as the highest bidder. Subsequently, the CoC decided to conduct an

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## Facts

Reliance Capital Limited was admitted into Corporate Insolvency Resolution Process (CIRP) on 06.12.2021, with Mr. Nageshwara Rao appointed as the Administrator. On 18.02.2022, an Invitation for Expression of Interest (EOI) was issued. A list of Prospective Resolution Applicants (PRAs) was issued on 19.04.2022, including Torrent Investments Pvt. Ltd. The Administrator issued a Request for Resolution Plan (RFRP) on 26.04.2022. On 28.11.2022, the final Resolution Plan was submitted by Torrent and IIHL. On 14.12.2022, a Challenge Process Note was issued. Torrent sought clarifications on 17.12.2022, and the administrator confirmed on 20.12.2022 that no changes would be permitted after the challenge mechanism. On 21.12.2022, the challenge mechanism was conducted, with

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## Issues and analysis

### Issue 1: Whether the CoC can conduct an extended challenge mechanism after the initial challenge mechanism …

**Ratio:** Regulation 39(1A) of the CIRP Regulations provides a framework for value maximization,

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**Reasoning:** The Tribunal reasoned that allowing an extended challenge mechanism after the conclusion

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**Interpretation:** The Tribunal interpreted Regulation 39(1A) as establishing a structured process

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**Application:** In this case, the Tribunal found that the CoC's decision to conduct an extended

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## Parties

- **Judges:** Shyam Babu…; P.N. Des…
- **Appellants:** Torrent Investment…
- **Respondents:** Reliance Capital…; Y. Nageswara Rao,…

## Timeline

- **2021-12-06 — CIRP Commen…**: Reliance Capital Limited admitted into…
- **2021-12-06 — Appointment of…**: Mr. Nageshwara Rao…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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