New Delhi: The Supreme Court on Monday dismissed a plea by operational creditors of Essar Steel, including Indian Oil Corporation (IOC), which had sought a stay in insolvency proceedings against the debt-laden company.
Accordingly, the matter will continue to be heard by the Ahmedabad branch of the National Company Law Tribunal (NCLT).
Solicitor-General Tushar Mehta, appearing for IOC, told the court that it would need more time to argue before the NCLT.
Kamlaljeet Singh Ahluwalia, an operational creditor of Essar Steel, had moved the Supreme Court on 6 February challenging two orders of the National Company Law Appellate Tribunal (NCLAT) directing the Ahmedabad bench of the NCLT to pass an order in the insolvency case by 11 February.
The orders in question passed by the appellate tribunal are of 23 January and 4 February. The matter is likely to be mentioned before a bench headed by Chief Justice Ranjan Gogoi on Thursday.
The plea had sought setting aside of the orders as it claims them to be contrary to the settled legal propositions and against the principles of natural justice. According to the petitioner, the NCLAT erred in passing the impugned orders and dictating the procedure to the NCLT in conducting a matter, which is contrary and beyond its scope of jurisdiction.
“The appellate authority, while exercising powers under Section 61 of the Insolvency and Bankruptcy Code, 2016, cannot assume supervisory jurisdiction over the adjudicating authorities and issue directions dictating the procedure to conduct the hearing of applications before the adjudicating authority," the petition said.
On 4 February, a two-member NCLAT bench headed by its chairperson Justice S.J. Mukhopadhaya said only after the matter had been heard at NCLT, Ahmedabad, would the appellate tribunal hear it on 12 February.
The NCLAT’s directive was issued while it was hearing a 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 appellate tribunal had also asked the operational creditors to choose one representative as the bench would not hear all of them individually.
The Ahmedabad bankruptcy court had turned down the bid by Essar Steel Asia Holdings Ltd (ESAHL) to regain control over the company, which came as a setback to the promoter Ruia family.