Torrent Investments has sought a refund of the Earnest Money Deposit (EMD) of ₹75 crore, deposited as part of the resolution process for Reliance Capital. However, the same could be delayed due to ongoing judicial proceedings, sources told businessline.

The EMD, submitted by Torrent in the form of bank guarantees, is required to be released within 14 days of NCLT approving a resolution process. The Mumbai bench of the tribunal approved IndusInd International Holding’s (IIHL) ₹9,650 crore resolution plan for RCap on February 27.

“RCap has returned the EMD submitted by other bidders. But because Torrent’s matter is sub-judice, RCap has sought legal advice based on which the CoC will take a decision on the refund,” a source said, adding that RCap’s internal legal team is also working on the matter.

The plea

Torrent’s plea challenging the validity and mechanism of second auction round or the ‘extended challenge mechanism’ for sale of RCap is pending before the Supreme Court. The apex court is next scheduled to hear the matter on April 2.

Some market participants believe that the refund of EMD will make Torrent’s appeal “infructuous” as they will no longer have any standing in the matter. However, others believe the two matters are separate and the SC hearing will continue regardless of the refund.

Meanwhile, IIHL–a Hinduja Group company, is awaiting other regulatory approvals to go ahead with the acquisition of Reliance Capital. The company has said that the takeover will not be completed in FY24 as earlier stated, but is expected to conclude by May 2024– within NCLT’s stipulated timeline.

Pending approvals include those from RBI, SEBI, IRDAI and among others. While applications to RBI and SEBI have already been made and their nod is expected soon, the approval from IRDAI could take some time, businessline had earlier reported.