New Delhi: The Supreme Court on Thursday gave two weeks time to NuMetal and ArcelorMittal to clear their corporate dues and become eligible to bid for the insolvency-hit Essar Steel.
A bench of Justice Rohinton Fali Nariman and Justice Indu Malhotra said the two companies should submit their resolution plan for acquiring Essar Steel that was facing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) once they cleared their corporate outstandings.
The apex court exercised its extraordinary power under Article 142 of the Constitution in allowing ArcelorMittal and NuMetal to make a fresh bid for Essar Steel.
The top court asked the Committee of Creditors to take a decision within eight weeks on rival bids of NuMetal and ArcelorMittal for Essar Steel.
It also said that time lost in National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and apex court in dealing with cases under insolvency code shall be excluded from mandatory 270 days resolution period.
The top court held that if nothing materialises within eight weeks then Essar Steel shall go into liquidation.
ArcelorMittal had alleged NuMetal was not eligible to bid for Essar Steel on several grounds, including that it was a “shell company” created by a firm in which Essar group promoters had majority shares, and if they had to become eligible they would have to clear their earlier debts.
NCLAT had ruled that NuMetal’s second bid for Essar Steel was eligible, but the same by ArcelorMittal would qualify only if it cleared the Rs 7,000 crore dues of two firms it was previously associated with.
While ArcelorMittal had challenged the order asking it to pay Rs 7,000 crore to become eligible for the bidding, NuMetal had alleged that NCLAT had “wrongly” applied legal provisions to enable its rival bidder to pay the dues of two debt-ridden firms even after it had bid for Essar Steel.
NCLAT had ruled that NuMetal’s second bid for Essar Steel was eligible but the same by ArcelorMittal will qualify only if it cleared the Rs 7,000 crore dues of the two firms, Uttam Galva and KSS Petron, it was previously associated with.