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The Supreme Court today agreed to hear an appeal filed by ArcelorMittal against the National Company Law Appellate Tribunal (NCLAT) order refusing to clear the company’s eligibility under Section 29A(c) of Insolvency and Bankruptcy Code before paying its dues.
The Apex Court will hear the plea on Wednesday, September 12.
ArcelorMittal has challenged the NCLAT order, which asked it to clear its dues worth Rs. 7,000 crore with respect to Uttam Galva and KSS Petron, to be eligible to submit a resolution plan for the debt-ridden Essar Steel in terms of Section 29A(c) of the IBC.
The NCLAT had directed ArcelorMittal to pay the NPAs of Uttam Galva and KSS Petron irrespective of whether its resolution plan is accepted or not.
Arcelor Mittal has also challenged the finding of the NCLAT that Numetal was not disqualified.
Promoted by the parent ArcelorMittal company, Uttam Galava and KSS Petron owe over Rs. 7,000 crores to their lenders and have been declared Non-Performing Assets (NPAs).
After the National Company Law Tribunal (NCLT), Ahmedabad Bench granted an opportunity to ArcelorMittal to cure its eligibility by paying off the debt of its related companies, a sum of Rs 7,000 crore was deposited by ArcelorMittal in an escrow account with the State Bank of India.
This deposit was however made conditional on the acceptance of ArcelorMittal’s bid by Essar Steel’s Committee of Creditors.
The Appellate Tribunal, in appeal against the NCLT order, declared that a conditional offer would not suffice in terms of Section 29A.
Thus, it gave one more opportunity to ArcelorMittal to settle the dues of Uttam Galva and KSS Petron by September 11 in order to cure its ineligibility.
The NCLAT order, on the other hand, had declared ArcelorMittal’s competitor Numetal as eligible to bid for Essar Steel.