The Reserve Bank of India (RBI) moved Mumbai bench of National Company Law Tribunal (NCLT) for
the insolvency and bankruptcy proceeding of Reliance Capital.
The RBI appointed former executive director of Bank of Maharashtra Y Nageswar Rao as the
administrator and gave him an advisory board to discharge his duty.
In a statement on its website, the RBI said there would be an interim moratorium on and fro m the
filing of the application till its admission or rejection by the NCLT.
Track your NCLT / NCLAT cases or orders in your apple iOS / Google Android smartphones. Available for free trial period of 15 days.
Under rules, the adjudicating authority will declare a moratorium, prohibiting suits or continuation
of pending suits or proceedings against the corporate debtor including “execution of any judgement,
decree or order in any court of law, tribunal, arbitration panel or other authority.”
The moratorium will also prohibit transferring, encumbering, alienating or disposing off by Reliance
Capital any of its assets or any legal right or beneficial interest, and will prevent any action to
foreclose, recover or enforce any security interest created by the company regarding its property
including any action under the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act
An owner or lessor of the property also cannot recover the property occupied by Reliance Capital.
However, the supply of essential goods or services to the company will not be terminated or
suspended or interrupted during the moratorium period.
The moratorium will also not apply to any transaction notified by the central government in
consultation with any financial regulator, and will not affect any surety in a contract of guarantee to
a corporate debtor.
