Future Retail Ltd was "hanging by a thread", as only 374 of its stores remained with it after over 830 shops shut down on the lapse of lease due to the non-payment of rent, the company told the Supreme Court on April 1.
"Amazon wanted to destroy us... they have destroyed us," senior advocate Harish Salve, appearing for Future Retail, said. He was referring to the litigation kicked off by the American e-commerce giant to block the Rs 27,000-crore asset sale deal between Future Retail and Reliance Retail, a subsidiary of Reliance Industries.
The court was hearing Amazon's plea to restrain Future Retail from alienating its retail assets until arbitration between the American company and the Kishore Biyani-owned group concluded.
"This court and other courts were repeatedly told by Future group that there will be no transfer of any assets and the proceedings before the NCLT should be allowed to go on," senior advocate Gopal Subramanium, who is representing Amazon, told the Supreme Court bench led by Chief Justice of India NV Ramana. "Your Lordships have recorded this undertaking in your order."
Future Retail said it had not affected the transfer of its stores and the eviction action was initiated by the landlords.
"We have not breached anything," senior advocate Mukul Rohatgi, arguing for Future Coupons Pvt Ltd, said. "Landlords are bound to take action if rent has not been paid... are we supposed to resist landlords when lakhs of rupees of rent remain unpaid?"
Future Retail's accounts have been frozen by the lenders after they were declared non-performing assets and no payments, even towards rent, could be made, he said.
Future Retail's lapsed leases were now in favour of Reliance and it was unfathomable that over 830 stores could be let go without any attempt to save them, senior advocate Aspi Chinoy, arguing for Amazon, said.
Responding to the allegation, Rohtagi questioned how could an injunction be sought against landlords and the new tenants?
Salve said Reliance couldn’t possibly be directed or refrained from doing something in the case since it was not a party to the dispute in the court.
The Supreme Court asked Amazon how could interim relief be granted when it involved restraining alienation of stores and the landlords owning the shops were not parties before the court.
A consortium of banks that are owed money by Future Retail urged the court not to pass an interim order that could prejudice the interests and rights of the lenders.
The case will next be heard on April 4 when the court is expected to conclude the hearing.
Also read: Factbox: Forums where Future Retail-Amazon case is being heard
The casefile
Future Retail, which is now on the brink of bankruptcy, had announced an asset sale deal worth Rs 27,000 crore with Reliance Retail in 2020. The announcement came on the back of the brick-and-mortar retail businesses taking a hit due to the COVID-19 pandemic.
The deal, however, was stayed in October 2020 by an emergency arbitrator under the Singapore International Arbitration Centre (SIAC) rules after Amazon invoked arbitration.
The American firm had entered into an investment deal with Future Coupons Pvt Ltd, a Future group firm, for Rs 1,400 crore. It gave certain protective rights to Amazon and barred the Future group from doing business with certain entities which involved Reliance Industries.
While the asset sale deal has not been given effect, a wide web of litigation arising from this dispute has now spread across various forums.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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