The court was reviewing Amazon’s request to stop FRL from selling its retail assets until the US company and the Future group reached an agreement in the arbitration. During the hearing Future Retail told the SC that just for Rs 1,400 crore, Amazon has destroyed a Rs 26,000-crore company.
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The Kishore Biyani firm told the Supreme Court on Friday that Amazon “wanted to destroy us, and it succeeded,” in response to the e-commerce giant’s request to stop Future Retail (FRL) from abandoning more of its outlets.
“For Rs 1,400 crore (the Amazon-Future deal), Amazon has destroyed a Rs 26,000-crore company,” FRL told a Bench headed by Chief Justice NV Ramana. “Amazon has been successful in what it wanted to do…We are hanging by a thread. No one wants to do business with us now. When the landlord gives an eviction notice, what can we do?” Senior attorney Harish Salve, who is representing FRL, remarked. He was alluding to Reliance Retail, a division of Reliance Industries, taking over 835 Future outlets for Rs 3,000 crore in unpaid rent.
He said that FRL had lost control of over 800 stores due to the expiration of leases due to non-payment of rent, and that the landlords had started the eviction process. “If Reliance doesn’t extend our scheme, what will we do? We are on oxygen now. No payments can be made from our accounts as they have been frozen due to the NPA classification.”
“Besides, we are running the remaining 374 stores on a wing and a prayer…” Salve added.
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Amazon argued it was difficult to imagine FRL relinquishing its 800 outlets without objection, claiming conspiracy between FRL and Reliance Industries’ affiliate. “Future’s claims that it was short of money and could not pay lease rental is a strategy and a sham…FRL lapsed leases being now in favor of Reliance is a deliberate and collusive act and it was unfathomable that over 830 stores could be let go of without any attempt to save them,” Amazon’s senior lawyer, Aspi Chinoy, remarked that he had never seen a lessee lose custody of assets so quickly without battling it out in court.
FRL handed its outlets to Reliance after providing the SC assurance on September 9, 2021, that its retail assets would continue to vest with it until the National Company Law Tribunal issued a final ruling sanctioning the merger plan.
Senior counsel Gopal Subramanium, who is also representing Amazon, accused the Future Group of “fraud” and stated that the rapid surrender of property was a “sham” and a “smokescreen” which should not be undertaken. The assets must stay with FRL pending the outcome of the arbitration, he stated. “The annual accounts as on December 2021 showed they had enough money to pay their rentals. There is not a slightly compelling evidence that they (Future group) are not doing well,” he said.
Meanwhile, FRL lenders have asked the judges to refrain from issuing any orders that would jeopardize their rights. Bank of India senior counsel Rakesh Dwivedi said that no interim order should be issued to restrict banks from taking any action.
The court was reviewing Amazon’s request to stop FRL from selling its retail assets until the US company and the Future group reached an agreement in arbitration. The case will be heard again on April 4, when the court is anticipated to reach a conclusion.