In their plea before the apex court, the CoC of Essar Steel said that once the plan was approved by the NCLT
and the NCLAT, any variation in payments to the financial and operational creditors of the company would amount to variation in the consent given by the members of the lenders’ committee.
“In the aforesaid circumstances, the directions to reconsider manner of distribution of proceeds under a resolution plan in light of the adjudicating authority’s (NCLT’s) suggestions and recommendations is completely unwarranted, unjustifiable, and equally without jurisdiction,” the CoC said in its plea.
Such directions by NCLT
asking the lenders to reconsider the distribution of funds among the various creditors take away the rights of the CoC to make commercial decisions. The orders, the CoC said, proceed on an assumption that the distribution of proceeds under ArcelorMittal’s plan is “discriminatory and fails to balance the interest of all stakeholders including the operational creditors".