Supreme Court Permits Future Retail Ltd. To Approach High Court Seeking Continuation Of NCLT Proceedings In Reliance Merger Scheme Approval
The Supreme Court on Tuesday has permitted Future Retail Ltd. to approach High Court by filing an application seeking continuation of NCLT proceedings beyond the 8th stage (Meeting of Shareholders and creditors) concerning the approval of a merger with Reliance.
A three-judge Bench of CJI NV Ramana, Justice AS Bopanna, and Justice Hima Kohli directed the Single Judge of the Delhi High Court to consider all the contentions of the parties and pass appropriate orders as to the continuation of the NCLT proceedings beyond the 8th stage and other regulatory approvals expeditiously uninfluenced by the observations made by the Supreme Court in the order.
The Court while allowing FRL to approach the Delhi High Court observed –
"…we grant liberty to FRL to approach the High Court by filing an application seeking continuation of the NCLT proceedings beyond the 8th Stage (Meeting of Shareholders and creditors)."
Senior Counsel Mr. Harish Salve appearing for the Future Retail Ltd. had contended before the Supreme Court that NCLT proceedings for grant of final approval of the proposed Scheme ought to continue as the culmination in the final order would take six to eight months for completing all the 15 steps.
Further, Mr. Salve argued that it is only when the final Scheme is sanctioned by the NCLT that the retail assets of FRL would get alienated.
It was contended that FRL was incurring expenditure every day and there was an imminent threat of insolvency. Also, the livelihood of 22,000 employees of FRL was also at stake. Therefore, the continuation of NCLT proceedings would not affect Amazon in any manner.
Senior Counsel Mr. Ranjit Kumar appearing for Amazon argued before the Court that FRL had already undertaken to complete eight out of the fifteen steps.
While Senior Advocate Mr. Mukul Rohatgi appearing for FCPL contended that CCI had revoked the initial Amazon-FCPL share purchase which effectively nullifies the arbitration. He argued that these facts have a bearing on the continuation of the proceedings which needed to form a part of the consideration.
Senior Advocate Mr. Gopal Subramanium appearing for Amazon argued that FRL conducted NCLT proceedings in contravention of the injunction order passed by the Emergency Arbitrator as well as the Enforcement order passed by the Single Judge of Delhi High Court. Further, he conducted that the scheme cannot be allowed to proceed in breach of the Emergency Award.
While Senior Counsel Mr. Aspi Chinoy appearing for Amazon, contended that both FRL and FCPL were not entitled to any interim relief as the initial order of the Emergency Arbitrator was not challenged by them, hence it was binding on them.
The bench led by CJI NV Ramana had earlier reserved its order on the issue of whether NCLT proceedings in the FRL-Reliance Merger deal could be allowed to continue and if Future Retail could be permitted to enforce the steps of the scheme.