Future Retail Ltd mounted a last-ditch attempt to shake off a defaulter tag by moving the Supreme Court to ward off the prospect that looms if it cannot come up with Rs 3,494 crore to repay its overdue amount by Saturday. The court will hear its plea early next week.

The Kishore Biyani-owned retailer had failed to pay the dues last month and under the RBI-mandated loan classification rules, the lenders have to recognise the default after a 30-day grace period that ends on January 29.

If the banks declare FRL a defaulter, they will have the right to initiate insolvency proceedings against the company, which could jeopardise the agreement struck in August 2020 with Reliance Retail which had offered to pay Rs 24,713 crore to acquire all the retail assets of the Future group.

The Kishore Biyani group firm’s petition is seeking to restrain the lenders from declaring the company as a defaulter.

FRL had to pay an aggregate amount of Rs 3494.56 crore as per a one-time resolution plan to a consortium of banks on or before December 31. However, the company could not execute its asset monetisation plans as it was challenged by Amazon on the basis of certain rights that were linked to its acquisition of a 49 per cent stake in Future Coupons Pvt Ltd under an agreement reached in 2019.

Ahead of Saturday’s deadline, the banks had issued three event-of-default notices on January 5, January 11 and January 15, warning the company that they could initiate insolvency proceedings after declaring the loan account as a non-performing asset (NPA).

FRL had tried to sell sell its small format stores like EasyDay and Heritage Fresh, but was stymied from doing so as Amazon fought for its right to enforce an order handed down by the Singapore arbitration council that had gone in favour of the Jeff Bezos-owned company.

FRL has now urged the top court to set aside the event of default notices, restrain lenders from declaring it as an NPA and grant a relaxation of the 30-day grace period. In its petition, FRL claimed that banks had waived their right to declare its inability to sell the small format stores as an event of default, but still went ahead with the three notices.

It is learnt that the lenders will wait for any directions from the Supreme Court before taking the next step. An official from a state-owned lender declined to comment since the matter is sub-judice.

Reliance Retail Ventures Ltd has already extended the date for completion of the deal with Future group till March 31.