New Delhi: The Supreme Court (SC) on Monday sought a response from Vedanta Ltd on an appeal by Renaissance Steel India Pvt. Ltd challenging its eligibility to bid for Electrosteel Steels Ltd as one of its affiliates in Zambia, Konkola Copper Mines Plc., was found guilty of violating environmental laws punishable with two or more years in jail.
Electrosteel is among the 12 initial accounts identified by the Reserve Bank of India (RBI) for resolution. Renaissance is one of the unsuccessful bidders for Electrosteel.
A bench headed by Justice Rohinton F. Nariman, while agreeing to hear the matter, sought replies from Vedanta, State Bank of India (SBI), Electrosteel, and the resolution professional, Dhaivat Anjaria; on the matter.
Renaissance claimed that the National Company Law Appellate Tribunal (NCLAT) had contradicted itself in its interpretation of the word “punishable" and had also misconstrued the phrase “convicted for any offence punishable with imprisonment for two years or more" as under provisions of the insolvency and bankruptcy code (IBC).
“The Hon’ble NCLAT has failed to consider that what is relevant under Section 29A(d) is the punishability of the offence (whether it is capable of being punished with imprisonment for two years or more) and not the capability of the offender to suffer such punishment," the plea said.
On 10 August, NCLAT ruled that Vedanta was eligible to bid for Electrosteel.
“We hold that ‘Vedanta Limited’ is eligible and clause (d) of Section 29(A) of the ‘I&B Code’ is not attracted in its case," the appellate tribunal said in its judgment to various appeals by Renaissance Steel against a 17 April order of the National Company Law Tribunal’s Kolkata bench approving Vedanta’s ₹ 5,320 crore resolution plan for Electrosteel.
Renaissance Steel had contended before the NCLAT that Vedanta was ineligible to bid under Section 29(A) of IBC as one of its affiliates in Zambia, Konkola Copper Mines—a unit of its UK-based parent Vedanta Resources Plc.—had been found guilty of violating certain environmental laws, punishable with two or more years in jail.
Electrosteel owes lenders more than ₹ 13,000 crore, of which about ₹ 5,000 crore is owed to SBI.