Supreme Court Seeks Banks' Response To Future Retail's Plea To Defer Coercive Steps Over Loan Default

The Supreme Court of India on Tuesday directed the consortium of 27 banks to file an affidavit in response to the writ petition filed by Future Retail Ltd seeking the deferral of coercive actions over loan defaults.A Bench comprising the Chief Justice of India NV Ramana, Justice AS Bopanna and Justice Hima Kohli also asked FRL to serve copy to the Reserve Bank of India and posted the. The plea has sought directions to the Reserve Bank of India to relax the "review period" contemplated under the August 6 Circular in the case of FRL According to FRL, the injunction orders passed in arbitration and related proceedings initiated by Amazon to which it was erroneously joined as non-signatory party has impeded the FRL's ability to adhere to the timelines of monetisation of Small Format Stores under the Framework Agreement. The petitioner has argued that despite having acknowledged the fact that the FRL's inability to monetize the Small Format Stores was on account of events outside the reasonable control of FRL and despite having accordingly waived their right to declare FRL's inability to do so as an "Event of Default", lenders have issued Event of Default Notices to the FRL threatening initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 According to FRL, these Event of Default Notices have been erroneously issued despite FRL having expressed and undeniably established its bona fide intent to adhere to the timelines prescribed in the Framework Agreement. Further, FRL had informed and explained the lenders of the orders of injunctions passed in arbitration and related proceedings initiated by Amazon FRL has submitted that an agreement was arrived at between the parties on 01.01.2022, wherein the Respondent lenders agreed to set up an Asset Sale Committee to monetize the Small Format Stores of the FRL and recover dues under the Framework Agreement.