The National Company Law Appellate Tribunal (NCLAT) on Thursday asked the NCLT Ahmedabad bench to expeditiously decide on the Essar Steel insolvency case, in which ArcelorMittal has emerged as the highest bidder.
Essar Steel lenders led by State Bank of India had filed an application with the NCLAT seeking early approval of the resolution plan.
The case has been running for about 500 days as against a maximum of 270 days allowed for a resolution under the Insolvency and Bankruptcy Code (IBC).
A two-member NCLAT bench, headed by chairman Justice S J Mukhopadhaya, asked the NCLT bench to take an early decision in the matter as per the order passed by the Supreme Court in this regard.
“We hope and trust that the adjudicating authority (NCLT) would pass the final order, one or the other way, keeping in view the decision of the Supreme Court. In case the adjudicating authority does not pass any order in accordance with law by an early date, it would be open to appellants to reagitate the matter,” the appellate tribunal said.
The CoC had on October 25 last year voted for accepting ArcelorMittal’s offer of upfront payment of Rs 42,000 crore to the lenders and an additional Rs 8,000 crore towards capital expenditure.
A group of operational creditors and Essar Steel shareholders challenged the CoC decision. While operational creditors say ArcelorMittal offer does not include clearing all of their dues, Essar Steel shareholders want them to pay Rs 54,389 crore to clear all outstanding, including of operational and financial creditors.
Senior advocate Gopal Subramanium appearing for the committee of Essar Steel Creditors (CoC) said that NCLT had adjourned the matter twice without giving any reason.
He also submitted that shareholders of the corporate debtors (Essar Steel) have also approached the NCLT, who has no “locus standi” in this matter before the Ahmedabad bench and are delaying the matter.
According to Subramanium, it has become almost 500 days, when the insolvency petition was admitted by the NCLT against Essar Steel on August 2, 2017.
The matter is listed at NCLT Ahmedabad on January 7 for next hearing.
The Supreme Court in its order passed in this matter on October 4, 2018 asking both resolution applicants — Russia’s VTB bank backed Numetal and ArcelorMittal — to clear their defaults of their related corporate debtor to be eligible for bidding.
The apex court had also said that the 270-day window for closing a resolution plan as mandated by the IBC Code would exclude any litigation in the National Company Law Appellate Tribunal or the Supreme Court.
Source: Financial Express, January 4, 2019