Breaking: Supreme Court orders ArcelorMittal and Numetal to clear dues to resubmit resolution plans

The Supreme Court today ordered both ArcelorMittal and Numetal to pay their dues in two weeks. The Court has afforded one more opportunity to both the bidders to pay off their NPAs..Once the dues are cleared, the bidders can resubmit their resolution plans within eight weeks..The judgment was delivered by a Bench of Justices Rohinton Nariman and Indu Malhotra. The Bench has modified the NCLAT order, which held that Numetal is eligible to bid for Essar Steel, by ordering Numetal to clear its dues as well to become eligible..Both Resolution Plans were held to be ineligible for being hit by Section 29A of IBC dealing with the eligibility of resolution applicants. The Court, however, on the request of Committee of Creditors and in public interest, in the exercise of its powers under Article 142 decided to give one more opportunity to both Resolution Applicants..ArcelorMittal had 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 had 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 an 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..Read Judgment