NCLT admits Reliance Communications Ltd. for insolvency

On May 9, the National Company Law Tribunal (NCLT) admitted Reliance Communications Ltd (RCom) for insolvency. The tribunal has accordingly allowed RCom to exclude the 357 days spent in litigation from the resolution process.

The NCLT Mumbai bench also superseded the communication company's board, allowed a consortium of 31 banks headed by State Bank of India to form a Committee of Creditors (CoC) and has appointed a new resolution professional to run the company.

The telecom company became the first Anil Ambani group company to be declared bankrupt after it had a total debt of more than ₹50,000 crore. The decision by the tribunal comes after RCom withdrew a petition last month challenging an order of the tribunal that allowed insolvency proceedings to be initiated under the Insolvency and Bankruptcy Code (IBC).

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The telecom company’s resolution professional had sought the exclusion of the period from May 30, 2018 to April 30, 2019 from the insolvency process citing litigation and the stay on the process by an appellate court and the Supreme Court.

The next hearing for the case has been scheduled on May 30 to file a progress report about the same.