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Gujarat HC dismisses Essar petition against RBI in insolvency case

More details awaited

BS Web Team 

Gujarat HC's Essar Steel verdict on Monday

The on Monday gave no relief to Steel, which had earlier approached it challenging the Reserve Bank of India’s (RBI’s) direction on bankruptcy proceedings.
 

The Reserve Bank of India (RBI) on Friday told the (HC) that there was no supporting document to its June 13 press release, directing to initiate proceedings against 12 non-performing assets (NPAs), including Steel. 

The submission was made during the hearing of Steel’s petition, filed on July 4, against proceedings initiated against it at the National Company Law Tribunal (NCLT) by the State Bank of India (SBI)-led 22 banks’ consortium as well as the Standard Chartered Bank (SCB).

Steel, in its petition, has challenged the RBI’s directive as “arbitrary” and an impediment to its recovery process amid debt restructuring talks with  

Both the and SBI counsels on Thursday had argued that Steel had suppressed facts that it was taken by surprise by the RBI’s June 13 press release by not mentioning the same in its original The SBI counsel submitted minutes of the June 22 joint lenders’ forum (JLF) meeting to support their arguments.

However, the Steel counsel maintained that the company had not suppressed facts since its was directed at RBI’s directive and not against NCLT proceedings. The counsel countered the respondents’ arguments that Section 238 of Bankruptcy Code (IBC), 2016, overrode other laws on and liquidation by maintaining that the circular was subject to IBC 2016 and violated the company’s fundamental rights. 

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