Business Standard

Gujarat HC dismisses Essar plea challenging insolvency proceedings

IANS  |  Ahmedabad 

The High on Monday dismissed Essar Steel's writ challenging the RBI directive to a consortium of banks led by the of to initiate insolvency proceedings against the company for its high non-performing assets.

Justice S.G. Shah issued an oral order stating that no relief could be granted to the steel major. The court's detailed order was expected later.

Essar Steel, in its July 4 petition, challenged the Reserve of India's (RBI) direction to banks to refer cases of 12 companies, including Essar, with high NPAs directly to the (NCLT) and initiate insolvency proceedings. The central bank's June 13 directive was issued through a press release.

The company had claimed that a unilateral action was being initiated when it was in a restructuring mode and objected that it was being clubbed with the other 11 major defaulting firms at such time. The steelmaker had also alleged that it was being singled out.

The RBI's counsel disputed both stating that it was not true that the company was discussing restructuring of repayments with banks, while insolvency proceedings would in fact help the company to shape up and not close it down.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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