The Kolkata bench of the National Company Law Tribunal (NCLT) on Thursday refrained from putting a stay order on the ongoing insolvency resolution process of Electrosteel Steels. This comes after Renaissance Steel moved the tribunal, asking it to prevent the resolution professional from proceeding on further negotiations with Vedanta, the highest bidder, till the issue of eligibility of the Anil Agarwal-led company and Tata Steel, the other contender, is determined. Abhishek Dalmia-led Renaissance Steel alleged that the resolution applicants Vedanta and Tata Steel are not eligible to bid for the Kolkata-based insolvent steel maker as per the Section 29A of the Insolvency & Bankruptcy Code (IBC). Notably, Dhaivat Anjaria, the resolution professional (RP), had received bids from Vedanta, Edelweiss Alternative Asset Advisors, Tata Steel and Renaissance Steel in January this year. Renaissance Steel, in a press release on Tuesday, said at the meeting of the committee of creditors (CoC) held on February 27, all the resolution plans were discussed and Vedanta was declared H-1 (highest bidder). The RP was authorised to renegotiate with Vedanta.
The Dalmia-led company claimed that it had earlier informed the RP that Vedanta and Tata Steel were not eligible to bid as per the norms of the IBC. Appearing before the Kolkata bench of the NCLT on Thursday, Renaissance Steel’s counsel Soumendra Nath Mukherjee said, “Vedanta is disqualified under Section 29A of IBC. We had reported before the resolution professional. I had written well in advance to the RP, pointing this disqualification issue. The response was, I cannot be informed in this matter.” Advocate Ratnanko Banerjee, also representing Renaissance, urged Justice KR Jinan to lay down a ‘direction’ for the ongoing resolution process for Electrosteel Steels. Justice Jinan, however, said he felt the application moved by Renaissance was ‘premature’. “You can get an opportunity to challenge it after the approval of the resolution plan. So, I feel that this application is premature. I can’t direct the COC at all. Criteria of the resolution applicants come under the exclusive right of the COC,” he said. Justice Jinan also said: “Even a layman can understand the criteria for eligibility of the resolution applicants. A resolution professional cannot be biased.” He added that the RP can file his replies to Renaissance’s petitions within seven days. When contacted, Anjaria declined to comment. The next hearing of the case is scheduled for March 15. Electrosteel Steels, which owes lenders Rs 11,309 crore, had been referred to the bankruptcy court by SBI under Section 7 of the IBC following a nudge from RBI in June last year.