NCLT allows RCap administrator's plea on implementation of resolution plan

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₹9,650 crore and was approved by a majority of lenders. The plan has to be implemented within 90 days of the date of the order which came on 27 February.

However, since certain regulatory approvals were pending in the matter, lenders to RCap had urged the Hinduja Group entity to secure the necessary clearances from the Insurance Regulatory and Development Authority (IRDA), the Securities and Exchange Board of India, and the Competition Commission of India. “Given the circumstances, the question arises whether Hinduja, the entity behind IIHL, will adhere to the stipulated timelines for payment.

Legal precedents suggest that the NCLT has consistently prioritized the completion of resolution processes within the mandated timelines to ensure the viability of the distressed entity and safeguard the interests of the creditors," said Sonal Alagh partner at Alagh & Kapoor Law Offices. “Thus, Hinduja's commitment to meeting the deadlines will likely be influenced by the NCLT's directive, reinforced by the legal obligation to fulfill the terms of the approved resolution plan." Alagh added that while the regulatory approval process may pose challenges to the timely execution of resolution plans, the NCLT's intervention in this case underscores the importance of adhering to approved timelines.

It reaffirms the tribunal's role in facilitating the smooth execution of insolvency and bankruptcy proceedings, with an emphasis on protecting the interests of creditors and ensuring the revival of distressed entities. As developments unfold, stakeholders will be keenly observing the NCLT's decisions, which are poised to have significant implications on the future of Reliance Capital and the broader insolvency resolution framework in India.