NCLT Orders IIHL To Deposit Rs 2,750 Crore In COC's Choice Of Escrow Account

On Thursday, the National Company Law Tribunal directed IndusInd International Holdings Ltd., a Hinduja Group subsidiary, to deposit Rs 2,750 crore into a Committee of Creditors-designated escrow account. This decision came amid the ongoing insolvency proceedings involving Reliance Capital Ltd.

Meanwhile, a press release from IIHL on Aug. 2 states that the company has deposited the required Rs 2,750 crore into its bank account as part of its equity contribution.

During the hearing, the counsel for the newly appointed the newly appointed RBI-appointed Reliance Capital administrator argued that the NCLT lacks the authority to extend the resolution plan timeline. Despite this, the Mumbai bench of the NCLT had previously allowed for additional time in the aid of insolvency, which IIHL now seeks to extend further—a request that should not be accommodated, it said.

Senior Advocate Manu Singhvi, representing IIHL, emphasised that the tribunal's prior order required the deposit to be made into an escrow account. However, Singhvi insisted that a neutral account should be used to deposit the funds.

The application filed by IIHL requested modifications to the tribunal’s July 24 order, citing difficulties in meeting compliance deadlines. IIHL argues that the existing conditions are unmanageable within the set timeframe.

Specifically, the application sought adjustments to the deposit requirements, including placing Rs 250 crore into an Indian escrow account for domestic equity and Rs 2,500 crore into an offshore escrow account for foreign equity, pending government approval.

In addition, IIHL sought to address the need for approvals from the RBI regarding control changes, securities pledging and foreign equity, along with finalising the trustee and providing a list of creditors and their payments. IIHL also requested to set a record date for delisting securities and complete regulatory forms for share capital reduction.