MUMBAI: Not just in insolvency cases, litigations have also held up recoveries in stressed assets where resolutions are being attempted outside the purview of the Insolvency and Bankruptcy Code (IBC).At times, even after a majority of lenders agrees to a plan, the resolution remains stuck owing to legal barriers. Experts pointed out that differences between lenders on resolution plans have also led to significant delays. As per extant regulations, 75% of consortium lenders by value and 60% of lenders by number have to approve a resolution plan for it to be implemented.However, there are instances where legal hurdles have held up resolution plans. For instance, Bank of Baroda (BoB), the lead lender to Reliance Home Finance Ltd moved the Delhi High Court on 3 March against a November 2019 stay order coming in the way of its stress resolution. The public sector lender sought vacation of the stay order passed in favour of Always Remember Properties Private Ltd, a Shapoorji Pallonji Group company. The order had disallowed Reliance Home Finance to dispose of its assets, except in certain specific cases.Always Remember Properties had provided ₹200 crore to Reliance Home Finance under an inter-corporate deposit (ICD) agreement in 2019 and when the latter defaulted on repayments, the company moved court, seeking its dues. According to Bank of Baroda’s petition, a copy of which has been reviewed by Mint, while Reliance Home owes ₹11,336 crore to lenders, the Shapoorji company has claimed ₹217.92 core.“Pertinently, a resolution plan in respect of respondent number 1 (Reliance Home Finance) is being worked out as per the terms of the extant RBI guidelines and approximately 95% of the lenders of respondent number one have agreed to consider the resolution plan. However, a condition precedent stipulated in all the resolution plans is the vacation of the stay imposed by this Hon'ble Court,” the bank said in its petition.While an email sent to Bank of Baroda remained unanswered till the time of going to press, the Shapoorji Pallonji Group declined to comment.Disagreements between lenders, part of a consortium, were seen in the past as well. In fact, Mint reported in December 2019 how Coffee Day Group’s sale of its Global Village Technology Park to private equity firm Blackstone Group Llp hit a hurdle, after Yes Bank showed reluctance in approving the ₹2,800-crore deal. The deal was finally completed last year in March.“India is a highly litigious country so the disruptions to a corporate resolution process through litigation is a fact we have to live with, there’s no way to avoid this from happening,” a senior lawyer, who is currently part of a stressed asset resolution under the June 7 circular, told Mint on condition of anonymity.The lawyer said the June 7 circular gives complete discretion to lenders on how best to resolve a case and they do not always have to deal with outside stakeholders. With the decision-making wresting in their power, it’s natural that lenders or bondholders with loan exposure but limited financial banking will turn to courts to get their opinions registered, he said.“I believe there are some kinds of assets that are best suited for resolution under IBC and others where the June 7 circular may work faster, and it depends on the co-operation offered by the promoter, the number of external stakeholders who might litigate,” the lawyer explained.