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The Ahmedabad Bench of the NCLT on Wednesday reserved its order on a plea filed by the Ruias, the promoters of the distressed Essar Steel. The promoters had sought to claim their right to participate in the meetings of Essar Steel’s committee of creditors (CoC) and raise objections to the plan submitted by ArcelorMittal.
The counsel for the Ruias had cited the Supreme Court judgment on the Ruchi Soya case last month, and claimed the ruling would be made effective from the date of enactment of the Insolvency and Bankruptcy Code (IBC), since the apex court had not specified that it did not apply prospectively.
“The Supreme Court had stated that suspended board members of a company should be included in all deliberations of the CoC, including discussions on resolution plans. The court had also said that resolution plans should also be shared with the suspended board members. The panel of financial lenders ought to vote after comments by suspended management and approve the plan with requisite majority,” the Essar counsel argued. The counsel also said the promoters were entitled to consider both resolution plans — Vedanta’s and ArcelorMittal’s — and comment on them.
The counsels appearing for the insolvency resolution professional, CoC and ArcelorMittal challenged Essar Steel’s promoters’ plea. The CoC argued that the plea was in direct conflict of the Supreme Court’s October 2018 order.
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