Mumbai: The Bombay high court on Wednesday disposed of a petition filed in January by Videocon Industries Ltd, objecting to the initiation of bankruptcy proceedings against the company.
The Venugopal Dhoot-controlled company approached the court against the Reserve Bank of India (RBI), which had referred it for insolvency proceedings, State Bank of India (SBI) which had filed the bankruptcy petition, and the Union government. Videocon is on the so-called second list of 28 defaulters that RBI had directed for early resolution under the new bankruptcy code. Videocon and Dhoot had sought a stay on initiating bankruptcy proceedings.
Since the National Company Law Tribunal (NCLT) has already admitted the bankruptcy petition, nothing is left in the current case, senior counsel Rafique Dada and counsel Shyam Kapadia, appearing for SBI and RBI, respectively, informed the court.
Videocon had challenged RBI’s decision not to extend the timeline as requested by SBI and the Joint Lenders’ Forum to re-rate Videocon’s restructuring proposal following changes in cash flows after subsequent changes in government import duty policy.
A division bench of justices Shantanu Kemkar and Nitin Sambre disposed of the petition. However, the court has kept the contentions of the company open. This means the company can approach the court again if it feels prejudice.
Law firm Kanga & Co. is advising Videocon and Dhoot, while law firms Cyril Amarchand Mangaldas and AZB & Partners are representing SBI and RBI, respectively.
According to Videocon’s FY17 annual report, the company is liable to repay the liabilities of other group companies to the extent of ₹ 5,082 crore as on 31 March 2017. The company’s total debt stood at ₹ 19,506 crore as of March last year. The company has made an offer to the lenders to sell its assets to pay its domestic debt.
The tribunal has also approved Anuj Jain as interim resolution professional for Videocon Industries as well as its unit Videocon Telecommunications.
Videocon Telecommunications was admitted to NCLT on 8 June for defaulting on ₹ 1,700 crore of debt.