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The judgment on the maintainability of the settlement proposal by Essar Steel Asia Holdings Ltd (ESAHL) to clear its entire debt of ₹54,000 crore under the Insolvency and Bankruptcy Code (IBC) will be pronounced by January 31, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) said on Monday.
Hearing arguments in favour and against the settlement offer by the shareholders of the debt-laden Essar Steel India Limited (ESIL), the two-member bench headed by justice Harihar Prakash Chaturvedi said, “We could pronounce our order on the maintainability of the petition (of ESAHL) even before January 31. Based on the order, related hearing could begin after that.”
This comes on the back of observations made by the National Company Law Appellate Tribunal (NCLAT) last week suggesting to take a decision on the resolution by an early date.
After hearing the arguments from the Resolution Professional, the Committee of Creditors and ArcelorMittal, the two-member tribunal comprising Justice Chaturvedi and justice Manorama Kumari also invited any interested entities seeking to be a party to the case by January 31.
Right to redemption
During the arguments on Monday, senior counsel Abhishek Manu Sanghvi appearing for ArcelorMittal objected to ESAHL’s contention on the right to redemption under the IBC Act to push for its settlement proposal.
“The IBC Act is a new and special Act, while the Transfer of Property Act is a 100-year-old and a not so special Act. The new and special Act would always over-rule. There is no right to redemption under the IBC Act as sought by Essar Steel Asia Holdings, said Singhvi accusing Essar of trying to ambush the (insolvency) process. “It is the worst kind of abuse of process,” he added.
The counsel appearing for ESAHL, Mihir Joshi, challenged the locus standi of ArcelorMittal to argue on the proposal made.
“The CoC has never denied my right to redemption. Arcelor’s objections are of little relevance as they have gone ahead and argued without establishing their locus in the case. The principle of insolvency law was to maximise the revenue and revive the company. It is not for sale of assets. It essentially is for the revival,” said Joshi.
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