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The National Company Law Appellate Tribunal (NCLAT) has directed the Ahmedabad Bench of the National Company Law Tribunal to expedite hearing on the Essar Steel insolvency case and announce the final verdict at the earliest.
Hearing a petition filed by the Committee of Creditors of Essar Steel, a two-member Bench, headed by NCLAT Chairman Justice SJ Mukhopadhaya directed the NCLT Bench to take a decision soon in the matter as per the Supreme Court order.
Essar Steel’s Committee of Creditors (CoC) was concerned over the prolonged delay in NCLT hearing even after the lenders have approved the resolution plan submitted by Arcelor Mittal.
Appearing for the CoC, Senior Advocate Gopal Subaramanium said the NCLT had adjourned the matter twice without giving any reason. As per the Insolvency and Bankruptcy Code, the outer limit for finding a resolution for a stressed asset is 270 days. The Essar Steel case has dragged on for over 500 days now with the multitude of litigations filed by the operational creditors and government bodies complicating the matter further.
Meanwhile, the Gujarat state tax department has filed a petition before the NCLT Ahmedabad against the resolution professional of Essar Steel to secure its dues of over ₹500 crore. The tax department has sought the approved resolution plan to ascertain the provision made for paying its dues.
Despite repeated reminders from the tax department, the resolution professional had refused to provide the details, citing the confidentiality clause. This forced the tax department to file the petition in the NCLT on December 19. The first hearing is scheduled for January 7.
In a separate development, NCLT Mumbai has come down heavily on the resolution professional and the CoC of Unimark Remedies for not considering the resolution plan of Omkara Asset Reconstruction, saying it was submitted after the deadline.
Rejection of Ruias’ offer
The observation made by Justices Bhaskara Pantula Mohan (Member) and V Nallasenapathy (Member) will have a bearing on the proceedings relating to Essar Steel as the resolution professional and CoC in this case too have refused to consider the Ruias’ resolution plan that committed to clear the entire debt of ₹54,000 crore.
Without considering the Ruias’ offer, the CoC has approved ArcelorMittal’s ₹42,000-crore resolution plan, which would result in a huge hair-cut for the banks, the operational creditors and the exchequer.
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