Kolkata: The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday asked the resolution professional of Electrosteel Steels Ltd to explain why he held Tata Steel Ltd and Vedanta Ltd eligible to bid for the stressed assets of the steelmaker, despite the two companies being convicted in criminal cases in the past.

Earlier this month, Abhishek Dalmia-led Renaissance Steel India Pvt. Ltd moved the Kolkata bench of the NCLT alleging in two separate petitions that both Tata Steel and Vedanta were ineligible for bidding under section 29A of the Insolvency and Bankruptcy Code (IBC) because they have been found guilty of criminal misconduct punishable with two or more years in jail.

Tata Steel and Vedanta were not immediately available for comments. Dhaivat Anjaria, the resolution professional, also could not be contacted immediately.

In its order, the bench directed the resolution professional to inform Renaissance Steel about his stand on the eligibility of Tata Steel and Vedanta within three days, following which Renaissance Steel is to hand in written objections, if any, to the resolution professional’s views.

The bench further directed the resolution professional to place Renaissance Steel’s objections before Electrosteel Steels’ committee of creditors, according to two lawyers who had seen the order. They asked not to be named.

Renaissance Steel had alleged that Tata Steel UK Ltd, a subsidiary, had pleaded guilty several times to violating the UK Health and Safety at Work Act. The company faced multiple prosecutions and was convicted each time, Renaissance Steel said in its petition. The offences were punishable with two years in jail, but the UK authorities chose to impose fines.

Under section 29A of IBC, anyone convicted in a criminal case punishable with two or more years in jail is barred from bidding for stressed assets.

Similarly, a subsidiary of Vedanta Resources Plc—Vedanta’s UK-based holding company—had violated pollution norms in Zambia, Renaissance Steel said.

Konkola Copper Mines of the Vedanta group had in 2010 pleaded guilty to four charges brought against it under pollution laws. Some of these offences were punishable with three years in jail, the Renaissance Steel petition said.

Renaissance Steel had said that the resolution professional accepted the so-called undertaking of eligibility at “face value", whereas he was “duty-bound to examine the issue of eligibility" before receiving the bids.

Enough information was readily available in the public domain to question the eligibility of Tata Steel and Vedanta, Renaissance Steel said in its petition.

Though the resolution professional has received bids, the creditors haven’t decided yet on a resolution plan for Electrosteel Steels. They have less than month to firm up a resolution plan.