The National Company Law Tribunal (NCLT) on Thursday gave Future Retail Ltd (FRL) until June 6 to file its response to the insolvency petition filed by Bank of India, which told the court that any delay in the launch of the resolution process could jeopardize recovery of money loaned to the business.
In April, Bank of India asked the court to initiate insolvency resolution proceedings against FRL, which failed to repay its loans.
At Thursday’s hearing, FRL lawyer Shyam Kapadia requested more time to file the response to the insolvency petition due to difficulties following the resignations of senior company officials.
Bank of India lawyer Ravi Kadam briefed the court on the urgency of the matter and said it was essential that an Interim Resolution Professional (IRP) immediately take control of the FRL.
He also said any further delays could jeopardize the recovery of public money that several Indian banks had lent to the struggling retailer.
Later, the Mumbai bench of the NCLT granted an extension until June 6 for the FRL to file the response to the motion.
Meanwhile, Amazon opposed the insolvency petition, arguing that the banks colluded with FRL and that any bankruptcy proceedings at this stage would jeopardize the rights of the e-commerce company.
Amazon has filed a petition for intervention under Section 65 of the Insolvency and Bankruptcy Code before the NCLT.
Article 65 deals with the provisions relating to the sanction of the fraudulent or malicious initiation of a procedure.
Kadam, during the hearing, also said that Bank of India was not involved in the dispute with a third party to the FRL.
Bank of India is the lead banker to FRL’s consortium of lenders.
FRL has defaulted on payment of Rs 5,322.32 crore to its lenders due to ongoing disputes with major e-commerce company Amazon and other related issues.
Earlier this month FRL chief executive Rakesh Biyani resigned while officials including the debt-ridden company’s general secretary tendered their resignations.
There is an exodus of people from the board and other levels at several Future Group companies after the cancellation of the proposed Rs 24,713 crore deal with Reliance Retail.
In March, Bank of India, through a public notice, claimed responsibility over the assets of FRL and warned the public against any dealings with the assets of the Future group company headed by Kishore Biyani.
Future Group’s deal with Reliance has faced opposition from Amazon and litigation is ongoing in various forums.