# In the matter of Reliance Capital Ltd. IA 1-2023 IN C.P. (IB)-1231(MB)2021

> NCLT judgment dated 2023-01-03. Citation: TCN-2023-NCLT-05211. The case involves a challenge to the actions of the Administrator in facilitating a…

- **Court:** NCLT
- **Order date:** 3 Jan 2023
- **Citation:** TCN-2023-NCLT-05211
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliance-capital-ltd-ia-1-2023-in-cp-ib-1231mb2021-de465f05

## Summary

### Background

The case involves a challenge to the actions of the Administrator in facilitating a non-compliant plan of the Hinduja Group, allegedly in breach of the challenge process note and the provisions of the Code. The applicant raised concerns regarding the challenge mechanism, specifically related to the financial proposals submitted by resolution applicants after the auction process. The applicant sought a direction to restrain the Administrator from referring the non-compliant plan to the Committee of Creditors (CoC). The challenge mechanism was devised to maximize the value of the assets of the Corporate Debtor in a transparent and fair manner. The administrator issued steps for conducting the challenge mechanism, reiterating that it should be conducted as per the

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## Facts

The Reserve Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Reliance Capital Ltd. The applicant challenged the Administrator's action of facilitating a non-compliant plan from the Hinduja Group, alleging it breached the challenge process note and provisions of the Code. The applicant raised concerns about the challenge mechanism, particularly regarding financial proposals after the auction. The Administrator issued steps for conducting the challenge mechanism. An auction commenced with a minimum threshold bid of INR 6,500 Crore. The applicant participated in the fourth round, offering INR 8,640 Crores, declared the highest NPV. The Administrator emailed resolution applicants confirming the applicant's bid as the highest. The

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## Issues and analysis

### Issue 1: Whether the Administrator should be restrained from referring the non-compliant plan of the Hinduja …

**Ratio:** The principle of maintaining the integrity of the evaluation process and preventing

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**Reasoning:** The court considered the submissions of the applicant's counsel and the apprehension that

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**Interpretation:** The issue involves interpreting the provisions of the Insolvency and Bankruptcy

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**Application:** The court applied the principle of maintaining the integrity of the evaluation

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## Parties

- **Judges:** SH. SHYAM BABU…; P.N. Des…
- **Appellants:** Reserve Bank of…
- **Respondents:** Reliance Capital…

## Timeline

- **2022-12-17 — Applicant's…**: Applicant raised concerns…
- **2022-12-20 — Administrator…**: Administrator replied to…

## 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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