the National Company Law Court (“NCLT”), Mumbai Bench, consisting of Justice PN Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), at the hearing of a claim brought under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), entitled Bank of India v Future Retail Ltd., granted time to Future Retail Ltd. to file a response to the motion. The next hearing date has been set for 12.05.2022.
Future Retail Ltd. (“FRL/Respondent”) is the flagship company of the Future group of companies led by Kishore Biyani which 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, Union Bank of India, Corporation Bank, Central Bank of India and Andhra Bank, Bank of India (“Petitioner”) is the principal lender. A framework agreement was concluded between the petitioner and FRL and the latter defaulted on its payment obligations under the agreement. The petitioner in March 2022 had issued a public notice to claim the encumbrance on FRL assets and warn the public not to trade in FRL assets.
In April 2022, the petitioner had filed a petition under Section 7 of the IBC before NCLT, Mumbai Bench, requesting the commencement of a Corporate Insolvency Resolution (“CIRP”) process against FRL . On 28.04.2022, the case was scheduled for its first hearing before the NCLT, Mumbai Bench, where FRL had time to file its response to the insolvency plea.
The proceedings before NCLT began in the context of a failed agreement with Reliance Group. By August 2020, FRL had become part of Rs. 24,713 crore transaction in which Future Group intended to sell nineteen of its companies operating in retail, wholesale, logistics and warehousing to Reliance Retail Ventures Ltd. (“RRVL”), a subsidiary of Reliance Industries Limited. All these companies were to consolidate into a single entity named “Future Enterprises Limited”. A General Assembly was convened by the FRL on 20and from April 23 to 23rd April 2022 for seeking approval of the Reliance Agreement. While shareholders and unsecured creditors voted in favor of the deal, secured creditors voted against the deal. On 23.04.2022, Reliance Industries Ltd. and FRL had confirmed the cancellation of the agreement.
Case title: Bank of India v Future Retail Ltd., CP (IB) No 527/MB/2022.