NCLT Mumbai Grants Time To Future Retail Ltd. To File Reply In Insolvency Plea
Pallavi Mishra
3 May 2022 4:34 PM GMT
The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while hearing a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), titled Bank of India v Future Retail Ltd., has granted time to Future Retail Ltd. for filing a reply to the petition. The next...
The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while hearing a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), titled Bank of India v Future Retail Ltd., has granted time to Future Retail Ltd. for filing a reply to the petition. The next date of hearing has been fixed to 12.05.2022.
Future Retail Ltd. ("FRL/Respondent") is the flagship company of the Kishore Biyani led Future Group of companies that operates popular retail chains such as Big Bazaar, Foodhall, Easyday Club and WH Smith.
FRL had availed credit facilities from a consortium of Lenders including Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank, the Union Bank of India, Corporation Bank, Central Bank of India and Andhra Bank, wherein Bank of India ("Petitioner") is the lead lender. A Framework Agreement was entered into between the Petitioner and FRL and the latter defaulted in its payment obligations under the Agreement. The Petitioner in March 2022 had issued a public notice to claim charge over the assets of the FRL and warn the public to not deal in the assets of FRL.
In April 2022, the Petitioner had filed a petition under Section 7 of the IBC before NCLT, Mumbai Bench, seeking initiation of Corporate Insolvency Resolution Process ("CIRP") against FRL. On 28.04.2022 the matter was listed for its first hearing before the NCLT, Mumbai Bench, wherein FRL was granted time to file its reply to the insolvency plea.
The proceedings before NCLT have commenced in the backdrop of a failed deal with Reliance Group. In August 2020, FRL had become part of Rs. 24,713 Crores worth deal wherein Future Group had intended to sell nineteen of its companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd. ("RRVL"), a subsidiary of Reliance Industries Limited. All these companies were to consolidate into one entity named 'Future Enterprises Limited'. A Shareholder's meeting was convened by FRL from 20th April to 23rd April 2022 for seeking approval for the Reliance deal. While the shareholders and unsecured creditors voted in favour of the deal, the secured creditors voted against the deal. On 23.04.2022 Reliance Industries Ltd. and FRL had confirmed the cancellation of the deal.
Case title: Bank of India v Future Retail Ltd., CP (IB) No. 527/MB/2022.
