Reconsideration after selection of bids possible under law: Videocon lenders to NCLAT

Lenders to Videocon group on October 6 requested the insolvency appellate tribunal NCLAT to allow them to reconsider Twin Star Technologies’ bid for the debt-laden group.

Twin Star Technologies had earlier emerged as the winning bidder for 13 companies of the Videocon group.

Solicitor General of India Tushar Mehta, representing the Committee of Creditors (CoC) of Videocon Industries, during the proceedings at NCLAT requested it “to restore the status quo ante, so as to put us (lenders) in a position we were on December 11, 2020.” On December 11, the CoC’s voting process was completed and Twin Star’s resolution plan was approved.

He further submitted that the lenders have the powers to reconsider their decision.

“I cannot predict right now that whether it would be a different decision or the same decision,” he said, adding CoC has the power to “undo it, alter it and modify and resend it.” Mr. Mehta added that CoC is still functioning and has not become ‘Functus officio’.

“We can lose it on only by one condition that CoC, after passing the resolution become Functus officio… then we can do nothing about it,” he said.

Functus officio is a Latin maxim that means that the jurisdiction of the designated authority comes to an end once he has performed the functions for which he was appointed.

Meanwhile, Senior Advocate Gopal Jain, representing the successful resolution applicant Twin Star Technologies, submitted that the lenders cannot call back the bids.

“There was no CoC meeting post the plan was approved. The four-page application latches on the observations of the adjudicating authority (NCLT) made in a different context,” said Jain.

However, the appellate tribunal adjourned the hearing due to paucity of time and listed the matter for October 28 and 29, when Twin Star would complete its arguments.

Last month, SBI, the leading lender of Videocon Industries, approached NCLAT requesting seeking fresh bids.

Billionaire Anil Agarwal’s Twin Star Technologies had offered Rs 2,962 crore for Videocon Industries, which was 4.15 per cent of the admitted claims of Rs 64,838.63 crore of lenders.

Earlier on June 9, the Mumbai bench of the National Company Law Tribunal (NCLT) approved the Rs 2,962 crore takeover bid of Twin Star Technologies for 13 companies of the debt-ridden group.

However, the NCLT order was stayed by the appellate tribunal on July 19 over petitions filed by two dissatisfied creditors— Bank of Maharashtra and IFCI Ltd.

Later, lenders to Videocon Industries had also approached the insolvency appellate tribunal seeking fresh bids for the 13 companies.