The National Company Law Appellate tribunal (NCLAT) on Monday directed the NCLT's Ahmedabad bench to decide on the insolvency resolution of Essar Steel by February 11, failing which it would take a call on February 12.
The two-member bench, headed by Justice S.J. Mukhopadhaya, said the Ahmedabad bench does not require to give hearing to all operational creditors but can hear their representative and complete the process within five days by February 11.
Fortunately for Essar Steel promoters, who are interested in retaining control of the bankrupt steel company, the NCLAT also directed the Ahmedabad bench to give limited hearings to the promoters and the third largest creditor, Standard Chartered Bank.
Essar promoter Prashant Ruia, along with two Essar Steel directors, had moved the NCLT on February 1 citing Supreme Court's January 31 order that requires the Committee of Creditors (CoC) to consult directors of an insolvent company before deciding on resolution.
Further, the NCLAT also directed the Ahmedabad bench to hear Standard Chartered Bank, which has raised its objection against ArcelorMittal's Rs 42,000 resolution plan approved by the CoC last October. The plan has been awaiting NCLT's approval.
The Ruias, promoters of Essar Group, had filed a resolution plan of Rs 54,389 crore to retain their control on Essar Steel on the day the CoC approved ArcelorMittal's bid.
However, the NCLT, in January, turned down the resolution plan of Essar Steel Asia Holdings (ESAH) saying the offer violated Section 12A of the Insolvency and Bankruptcy Code (IBC).
Section 12A states that the applicant (in this case, State Bank of India) who moved the bankruptcy court against an insolvent company can withdraw from the resolution proceedings with the approval of 90 per cent of the financial creditors.
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