The Supreme Court on Thursday refused to pass any interim orders restraining banks from classifying Future Retail as a non-performing asset.

Lenders to Future Retail Limited (FRL) have started classifying the retailer as an NPA after the company missed payments due to the banks, they told the top court. A consortium of 27 banks, including 10 private banks, has an exposure of Rs 17,000 crore to FRL.

The company had sought time from the top court to arrive at a resolution with lenders through talks. Future last month challenged its lenders in the top court to avoid facing insolvency proceedings or classifying the company as a defaulter after it missed making certain payments on its loans.

Future has argued it is unable to sell assets and make payments due to its ongoing dispute with partner Amazon.com Inc. According to Future’s plea, lenders served a default notice despite agreeing to extend the timeline for the company to monetise its small-format stores.

The group firm had sought some more time for loan payment and requested the Supreme Court to "extend the timeline stipulated under the Framework Agreement for monetization of the Small Format Stores in line with the minutes of the meeting dated 01.01.2022.”

However, the banks today suggested an open bid between Amazon and Reliance to settle the dispute and ensure recovery for banks. They told the court the lenders' contract with FRL is the only one that involves depositors' money. If the Rs 17000 crore exposure to FRL is pushed by a year, it will grow to Rs 25,000 crore, they said.

“Entire assets of FRL, which we are entitled to sell, can be subjected to an open bid,” the banks have suggested.

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There is no connection between the Amazon issue and the dues claimed by the banks, the lenders told the court. “These people are flush with funds, why arbitrate, why litigate, Amazon and RIL should agree to open bid,” they said.

However, Future Retail had earlier submitted that Amazon can't participate in an open bid due to restrictions on multi-brand FDI retail.

Meanwhile, the Supreme Court has reserved its order on allowing Future Retail to proceed with National Company Law Tribunal (NCLT) nod for Reliance Deal.

(Edited by : Kanishka Sarkar)