Steel major ArcelorMittal will up its bid for Essar Steel to Rs 42,000 crore and will also settle its dues of Rs 7,000 crore to Uttam Galva and KSS Petron, to stay ahead of rival bidder Numetal, sources close to the development said. The Lakshmi Mittal-promoted steelmaker\u2019s move comes after the National Company Law Appellate Tribunal (NCLAT) said late last week that Arcelor\u2019s bid would be eligible only if it clears the dues of Uttam Galva and KSS Petron. The appellate tribunal asked ArcelorMittal to clear the dues by September 11 while ruling that Numetal\u2019s second bid for an amount of Rs 37,000 crore was eligible. Meanwhile, a meeting of the committee of creditors (CoC) of Essar Steel remained inconclusive on Monday probably because lenders were awaiting dues of Rs 7,000 crore to be paid by ArcelorMittal. While the company had earlier said it would repay the dues only if it was allowed to take control of Essar Steel, the NCLAT insistence it must repay the loans to be eligible to bid for Essar Steel means it had no choice if it wanted to stay in the race. The H1 bidder is likely to be selected only after both bids are declared eligible. Both ArcelorMittal and Numetal have been locked in a bitter battle for more than a year to gain control of Essar Steel, one of the dozen companies on the Reserve Bank of India\u2019s (RBI) first list to be referred to the National Company Law Tribunal (NCLT) for insolvency proceedings under the Insolvency and Bankruptcy Code (IBC). The company owes lenders close to Rs 49,000 crore; State Bank of India is the lead banker in the consortium. In a written statement, ArcelorMittal confirmed that it submitted a revised proposal to Essar Steel\u2019s CoC. \u201cThe financial terms of the proposal are confidential, but represent a material increase to the previous offers made by the company,\u201d the steelmaker said, without disclosing the bid value. It added that the revised offer includes a commitment to pay the entire amount due to the financial creditors of Uttam Galva and KSS Petron. Essar Steel\u2019s resolution professional (RP) Satish Gupta had rejected the first round of bids submitted by both ArcelorMittal and Numetal for violating Section 29 A of the IBC that bars promoters of defaulting companies to bid for their assets at the NCLT, and had invited a second round of bids. However, the Ahmedabad bench of the NCLT had asked both the bidders to rectify their bids. It had stayed the opening of the second round of bids. The bidders had moved the NCLAT against the NCLT\u2019s order. Numetal had asked for the second round of bids to be considered. Vedanta had also bid in the second round, and JSW Steel had expressed interest to partner with Numetal. Numetal\u2019s first bid was held to be ineligible by the RP on the grounds that Rewant Ruia, who is associated with the company, is the son of Ravi Ruia, a promoter of Essar Steel. The shareholders of Numetal include Russia\u2019s VTB Bank and engineering firm Tyazhpromexport, financial investor Aurora Enterprises (in which Ruia has an interest) and commodity trading company Indo International Trading. ArcelorMittal\u2019s bid was disqualified as it was considered a promoter of Uttam Galva Steels and KSS Petron, both defaulters. For the second round of bids, Numetal offered to replace the shareholding of Rewant Ruia.