8 February 2019: As the Essar Steel’s insolvency and bankruptcy case plays out at the NCLT Ahmedabad, awaiting verdict due by 11 February 2019, there might be yet another spanner in the wheel which could throw the process off the track, even if for a short duration. The Supreme Court will hear an operational creditor Kamaljeet Singh Ahluwalia’s plea on 11 Feb. Ahluwalia had moved the apex court against the NCLAT directive to NCLT Ahmedabad to decide on Essar Steel’s resolution plan by 11 Feb.
It may be noted here that the National Company Law Appellate Tribunal (NCLAT) had asked the National Company Law Tribunal (NCLT) to decide on Essar Steel’s resolution plan involving ArcelorMittal’s Rs 42,000-crore bid by 11 Feb. The NCLAT itself is reportedly due to take the matter up on the following day, 12 Feb, after it is heard at the NCLT Ahmedabad.
Earlier, Kamaljeet Singh Ahluwalia had moved NCLAT before approaching the Supreme Court, requesting it to ask NCLT to hear his plea before the ArcelorMittal resolution plan is accepted. His plea was rejected by a two-judge bench headed by Justice S J Mukhopadhaya, which ruled that NCLAT would not take the matter up before the hearing is finished at the NCLT.
According to Essar Steel’s website, the company owes Rs 41.4 crore to Kamaljeet Singh Ahluwalia. Essar Steel has long been embroiled in the insolvency and bankruptcy case.
Meanwhile, the promoters and the stakeholders in the company eye the 11 Feb deadline as the NCLT will be taking a final call over ArcelorMittal’s Rs 42,000 crore resolution proposal submitted by the Committee of Creditors (CoC). The NCLT has already rejected a plea by Essar Steel’s original promoters — the Ruia family — who had sought to enter into the race for acquiring the company back from the insolvency and bankruptcy process.
The Essar Steel case is one of the 12 large cases listed by the RBI in its first list for resolution under 2016 Insolvency and Bankruptcy Code. The company had declared bankruptcy in 2015 after it faced several debt issues and fraud allegations. The company, which was promoted by the Ruia family, got involved in insolvency proceedings in August 2017.
After a prolonged bidding war, Lakshmi Niwas Mittal’s ArcelorMittal emerged as the winning bidder with Rs 42,000-crore bid. However, soon after, Ruias sought to get back the control of the company by making a counter offer of Rs 54,000 crore.