Essar Steel: NCLAT rejects plea of operational creditor.
The Rs. 54,389 crore offered by Essar Steel Asia Holding, which is much higher than the winning bid of ArcelorMittal’s at Rs. 42,000 crore, is not maintainable as the only way to make a proposal is through Section 12A, said the court.
After being rejected by NCLT, the promoters moved to the National Company Law Appellate Tribunal (NCLAT). On Wednesday, even NCLAT declined the plea of an operational creditor of debt-ridden Essar Steel seeking recovery worth Rs. 800 crore. NCLAT had rejected the debt settlement proposal put forward by the shareholders of Essar Steel saying the offer violates Section 12A of the Insolvency and Bankruptcy Code (IBC), on Tuesday.
A bench headed by Justice S.J. Mukhopadhaya refused the plea by operational creditor Kamaljeet Singh, who had requested NCLAT to direct the Ahmedabad bench of National Company Law Tribunal (NCLT) to hear his plea before taking any decision on ArcelorMittal resolution plan. Singh has claimed dues worth Rs. 800 crore and is seeking its recovery.
It may be noted that the ArcelorMittal group offered to pay creditors Rs. 42,000 crore to take over Essar Steel which faces insolvency proceedings to recover Rs. 50,800 crore of unpaid loans. The Committee of Essar Steel creditors approved the proposal, ignoring a last-minute offer by the shareholders of Essar Steel to pay dues of Rs. 54,389 crore to both financial and operational creditors.