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Business: The National Company Law Appellate Tribunal (NCLAT) has rejected the appeal of Reliance Realty, a subsidiary of Reliance Communications. The company had filed a petition to recover rent and property from Independent TV.
NCLT order upheld
The tribunal, while upholding the National Company Law Tribunal (NCLT) order of the Mumbai bench, said that the liquidation process of Independent TV (formerly Reliance Big TV) should be completed in a time-bound manner and should be avoided from any delay.
No right to interrupt the liquidation process
A two-member bench of NCLAT said that the liquidation process cannot be disrupted or diverted by the appellant, who till now had not raised any concrete objection regarding the ownership of the property. The bench also said that the liquidator is permitted to remove all the movable properties of the corporate debtor from the leased premises and Reliance Realty is restrained from obstructing the same.
What is the matter?
Let us tell you that on November 27, 2017, Reliance Realty had leased a part of the Dhirubhai Ambani Knowledge City (DKAC) complex to Independent TV, so that it could run its direct-to-home (DTH) business and goods storage.
Independent TV, which had bought the DTH business from Reliance Group under a share purchase agreement on November 27, 2017, is now in the process of full liquidation. A draft agreement for the use of the premises was also given to the company on the same day.
Initially, the company paid rent, electricity and maintenance charges regularly till October 2018, but after that the payments stopped. Due to non-payment, insolvency proceedings were initiated against the company on 26 February 2020. After this, the CEO of the company handed over all the assets to the resolution professional under the provisions of the Insolvency and Bankruptcy Code (IBC).
What is the logic of Reliance Realty?
Due to lack of buyer, NCLT directed to start the liquidation process of the company on March 17, 2023, after which the notice of e-auction was issued. However, during the liquidation process Reliance Realty refused to allow potential bidders to inspect the properties. The company argued that Independent TV had not paid rent and electricity for the last five years, so any support could be given only after clearing the dues first.
During the liquidation process of Independent TV, Shri Sai Baba Ship Breaking Company emerged as the successful auction buyer of the company’s assets by winning the bid. After this, on December 10, 2024, the sale certificate and possession memorandum of assets/inventory totaling 1,874 units were handed over to the company.
However, Reliance Realty then approached NCLT to recover the long outstanding rent and other dues. This application was filed at a time when CIRP was going on against the company.
