Begin typing your search above and press return to search.
Law Firms

NCLT Mumbai Initiates Insolvency Proceedings Against Reliance Broadcast Network Limited

1 March 2023 3:15 PM GMT
NCLT Mumbai Initiates Insolvency Proceedings Against Reliance Broadcast Network Limited

The National Company Law Tribunal (‘NCLT’), Mumbai bench comprising of Mr. Kuldip Kumar Kareer (Judicial Member) and Ms. Anuradha Sanjay Bhatia (Technical Member), while adjudicating an application filed by IDBI Trusteeship Services Limited, has initiated Corporate Insolvency Resolution Process (“CIRP”) against Reliance Broadcast Network Limited (“Corporate Debtor”). Mr. Rohit Ramesh Mehra has been appointed as the interim Resolution Professional.

Background Facts:

The Corporate Debtor had issued on a private placement basis Unlisted Secured Redeemable Non-Convertible Debentures, in which the petitioner had subscribed for the NCDs worth approximately INR 165 crores, vide three [3] difference Debenture Trust Deeds. The said debt was secured by way of apart from Deeds of Hypothecation executed by the Corporate Debtor and Deeds of Guarantee executed by Reliance Capital Limited in favour of the Debenture Trustee. As the Corporate Debtor failed to redeem the NCDs on the due date, the petitioner on behalf of L&T Investment Management Limited had issued demand notice, inter alia, calling upon the Corporate Debtor to make payment towards the outstanding amount as on the redemption date.

Having received no response from the Corporate Debtor, IDBI filed a Petition under Section 7 of IBC seeking initiation of CIRP in respect of a default for an amount of INR 175 crores (approx.).

Proceedings Before the NCLT:
During the course of the argument, the following issues were raised by the Corporate Debtor:

  • The default has occurred during the suspended period of IBC and thus, no CIRP can be ever initiated in terms of the provisions of Section 10A of IBC.
  • Lack of jurisdiction on account of exclusive jurisdiction being conferred upon by the parties to the Tribunals in New Delhi.
  • Debenture Trust Deeds cannot be relied and acted upon and ought to be impounded by the Adjudicating Authority as the same are insufficiently stamped.
  • Debt has not become due and payable in light of the risk factor i.e., COVID-19 in force.
  • CIRP cannot be initiated for the same set of debt before two different authorities, as the Financial Creditor had already filed its claim for the same set of debt before the Administrator appointed in the CIRP of the Corporate Guarantor i.e., Reliance Capital Limited.

The aforesaid objections were successfully negated by the financial Creditor and as a result, the Bench admitted the Corporate Debtor into CIRP.

Case Title: IDBI Trusteeship Services Limited V. Reliance Broadcast Network Limited

Case No.: C.P. 310 OF 2022

Counsel for Petitioner: Mr. Divij Kumar (Partner, Luthra and Luthra Law Offices India) a/w Mr. Varun Tandon, (Senior Associate, Luthra and Luthra Law Offices India).

Counsel For the Respondent: Mr. Pranav Desai a/w Mr. Kiran Padalkar, Advocates.

Click Here To Read/Download Order

Next Story