NEW DELHI :
The National Company Law Appellate Tribunal (NCLAT) on Wednesday directed the Ahmedabad bench of the National Company Law Tribunal (NCLT) to pass an order on the insolvency case filed against Essar Steel (India) Ltd.
“We allow the designated authority (NCLT) to pass appropriate orders by the next date, failing which this appellate tribunal will decide," said a two-member NCLAT bench headed by its chairperson Justice S.J. Mukhopadhaya.
If the Ahmedabad bench of the NCLT does not pass any order by January 31, then the appellate tribunal will pass an order accordingly on the next date of hearing, the bench added.
The NCLAT’s directive came while it was hearing the petition filed by the committee of creditors (CoC) of Essar Steel, through State Bank of India, against resolution professional Satish Kumar Gupta and others.
The matter is listed before the Ahmedabad bench of the NCLT on 31 January for hearing.
On 3 January, the NCLAT had directed the Ahmedabad bench of the NCLT to expedite the insolvency case filed against Essar Steel.
The financial creditors had voted in favour of the resolution plan of ArcelorMittal on 25 October. Essar Steel shareholders then proposed to pay all its lenders, including operational lenders, in full.
Later, Standard Chartered Bank also approached the dedicated bankruptcy court challenging the resolution plan approved by the majority of the financial lenders. Standard Chartered, which has more than 7.5% weight in the voting process, voted against ArcelorMittal’s resolution plan.
Essar Steel owes more than ₹ 49,000 crore to more than two dozen banks led by State Bank of India. It runs a 10 million tonne steel mill at Hazira in Gujarat, which is involved in ore beneficiation, pellet making, iron making, steel making, and downstream facilities.
“The overriding objective of the Insolvency and Bankruptcy Code (IBC) is maximization of recovery for creditors and this has been established time and again by courts at all levels. Creditors of Essar Steel, including operational creditors, should not be forced to accept a resolution plan which undervalues the company and its assets," said a spokesperson of Essar Steel on Wednesday.
On Tuesday, a spokesperson of ArcelorMittal, whose resolution plan emerged as the highest bid for Essar Steel, said, “In the case of Essar Steel, opportunities have been provided to bidders for nearly a year to first be eligible and second, to make a compelling offer. ArcelorMittal has followed the process from the start. We fully expect the process to continue to be implemented correctly and as per the law and that statements attempting to convince otherwise not be given any credibility."
The matter will be heard next by the NCLAT on 4 February.