AII and RHFL had filed separate but identical appeals seeking the go-ahead for the former’s resolution plan to take over the company in June 2021. The offer translates into a 74% haircut on RHFL’s total dues of ₹11,541.44 crore.
Both have cited an order by the apex court in September in the case – Sebi vs Rajkumar Nagpal & Ors – that allowed lenders of
Commercial Finance (RCFL) to go ahead with the resolution plan.
A Bench led by Justice BR Gavai issued notice to various parties and impleaded
in the case.
It posted the matter for further hearing on January 31 after additional solicitor general N Venkataraman, appearing for the Securities and Exchange Board of India (Sebi), sought time on the grounds that the market regulator was still looking into the issue of the other two voters – non-debenture holders and abstaining voters – since only debenture holders are protected by the top court order.
Challenging the Bombay High Court’s order of December 16 – which had refused to approve AII’s resolution plan – on a lack of jurisdiction, senior counsel Dhruv Mehta, appearing for AII, said the HC had set aside the entire process of selecting a resolution applicant and resolving debts due to small investors and turned back the clock to nearly two years ago when the process had started.
Mehta said Sebi’s objections on the ground that its circular had not been applied were counter-productive and failed to consider the interests of 19,353 retail debenture holders having principal debt of ₹5 lakh or less.AII’s plan provides for a 100% principal pay out to these debenture holders in comparison to the 227 small debenture holders in RCFL’s case, Mehta said.
The present case involves the interest of 20,861 debenture holders which subscribed to debentures issued by RHFL from time to time.
Applying the Sebi circular to the voting conducted on May 13 will lead to unscrambling of the resolution plan which had already been agreed upon by the lenders under the RBI framework, RHFL said in its appeal.
The plan, if approved, would ensure that the creditors, including 12 nationalised banks, would be permitted to recover their dues, RHFL said, adding that a technical objection should not stand in the way of the SC from doing complete justice.