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NCLAT directs NCLT to decide on ArcelorMittal's resolution plan for Essar Steel by Feb 11

Press Trust of India  |  New Delhi 

The National Company Law Appellate Tribunal on Monday directed the NCLT Ahmedabad bench to take a final decision over ArcelorMittal's Rs 42,000 crore resolution plan for Essar Steel by February 11, failing which it would call records and pass order accordingly.

A two-member bench headed by Justice S J Mukhopadhaya has directed to list the matter on February 12.

"If no order is passed by 11th February, 2019, this Appellate Tribunal may call for records and pass appropriate order under Section 31 of the I&B Code," said National Company Law Appellate Tribunal (NCLAT).

The NCLAT said that a "detailed hearing is not required to be given including all the creditors" by the Ahemdabad bench and "it should be completed within five days".

The appellate tribunal has directed the NCLT to give hearing only to the representative of the operational creditors of debt ridden Essar Steel and pass order "on an early date" as per its previous order passed by it on January 23.

The NCLAT also directed to give limited hearings to the promoters of the Essar Steel but asked to complete the entire process within next five days.

"Further, taking into consideration the interest of the Promoters, NCLT may provide the Promoters limited hearing but it should be completed within five days. A detailed hearing is not required to be given including all the creditors," said the appellate tribunal.

In its order, the NCLAT has also directed NCLT to also hear the Standard Chartered Bank, which is opposing the resolution plan approved by the Committee of Creditor (CoC) of Essar Steel and the resolution professional of the company.

"Further, the dissenting member of the CoC (Standard Chartered Bank herein) having raised objection to the Resolution Plan, it should be given hearing before passing any final order," NCLAT order said.

Standard Chartered Bank, the third-largest secured financial creditor of Essar Steel, has filed plea before the NCLT alleging that the resolution plan does not comply with the Insolvency and Bankruptcy Code.

The NCLAT direction came after an application filed by ArcelorMittal, whose Rs 42,000 crore takeover proposal of the indebted steel-maker has been approved by the CoC and is pending before the NCLT for approval.

During the proceedings, the NCLAT was informed that adjudicating authority (NCLT) is hearing a large number of operational creditors and also given time to dissenting member of the CoC Standard Chartered Bank.

Earlier, on January 29 NCLT Ahemedabad had rejected the debt settlement proposal put forth by the shareholders of Essar Steel saying the offer violates Section 12A of the Insolvency and Bankruptcy Code.

The NCLT had said that Rs 54,389-crore offer by Essar Steel Asia Holding, which is much higher than the ArcelorMittal's Rs 42,000 crore bid, is not maintainable as the only way to make a proposal is through Section 12A.

Essar Steel owns a 10-million-tonne steel mill in Gujarat.

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

First Published: Mon, February 04 2019. 19:30 IST