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NCLT orders initiation of insolvency proceedings against Future Retail, Amazon’s objection dismissed

Photo:FILE Future Retail

Highlights

  • NCLT accepts the appeal of Bank of India
  • Amazon also opposed Future Group’s proposed deal with Reliance
  • Amazon had opposed the insolvency action against the company, saying

NCLT on Wednesday ordered initiation of insolvency resolution proceedings against debt-ridden Future Retail (FRL). Also, the tribunal rejected Amazon’s objection in this regard. A bench of Justices PN Deshmukh and Shyam Babu Gautam said it is allowing Bank of India’s appeal under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate insolvency resolution proceedings against FRL. Section 7 deals with allowing financial lenders to initiate insolvency proceedings against defaulting companies.

Failed to pay Rs 3,495 crore

The Mumbai bench of the National Company Law Tribunal (NCLT) appointed Vijay Kumar Iyer as the interim resolution professional for Future Retail (FRL). The tribunal also rejected Amazon’s objection to the BoI’s plea. The BoI had filed the petition before the tribunal after the FRL failed to pay Rs 3,495 crore under the one-time restructuring scheme. Amazon also opposed Future Group’s proposed deal with Reliance. The deal was later cancelled.

BOI had applied

BOI’s counsel Ravi Kadam, while applying for initiation of insolvency proceedings, had said that the consortium of banks is supporting the petition and it is necessary for the tribunal to accept the petition for protection of the company’s assets. On May 12, Amazon filed an appeal under Section 65 of the Insolvency and Bankruptcy Code for interference in the matter. Amazon opposed the insolvency proceedings against the company, saying there was a nexus between Bank of India and FRL. Amazon had said that it would “compromise” its rights to initiate insolvency proceedings in the matter now.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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