Essar Steel moves court against RBI's insolvency move, hearing on July 7

Challenges RBI's 'arbitrariness' in selecting the 12 stressed accounts

This article first appeared on Business Standard on 5 July.

Essar Steel on Tuesday filed a petition in the Gujarat High Court, challenging the alleged arbitrariness of the Reserve Bank of India (RBI) in selecting stressed accounts for initiating insolvency proceedings under the new bankruptcy law.

Essar’s main contention is that the RBI made an “arbitrary distinction” between the 12 identified companies and the rest. While the RBI’s directive to banks was to refer the 12 cases directly to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), 2016, other stressed borrowers were given six