Although the resolution plan for Essar Steel and Bhushan Steel and Power has been approved by the NCLT, these were subsequently challenged before the Supreme Court and National Company Law Appellate Tribunal (NCLAT), respectively. In the case of Essar, the apex court reversed the judgment of NCLAT, where the latter had ruled that operational creditors have to be treated at par with financial creditors at the time of settling claims.
In the Bhushan Power & Steel case, NCLAT has asked the enforcement directorate and the Union ministry of corporate affairs to reach a consensus regarding the attachment of assets. Differences between the two official bodies has stalled the resolution process — JSW Steel was set to take over the company, being the successful resolution applicant.
On the three unresolved cases, the insolvency resolution process at Amtek Auto has re-commenced. It was headed for liquidation after UK-based Liberty House, the successful resolution applicant, did not fulfil its earlier commitment. The committee of creditors then approached the apex court against liquidation, saying this step would benefit none and hit the nearly 2,500 employees.
In the case of Era Infra Engineering, the lenders got a breather from the bankruptcy court, as 215 days were excluded from the insolvency process calculation, since this had been marred by investigations of income tax authorities, making it difficult for prospective bidders to examine the books of accounts, which were in the custody of the authorities.
On Jaypee Infratech, the apex court has reserved its order on Jaypee Group’s plea against the appellate tribunal order that the parent company of a corporate debtor cannot participate in the debt resolution process. Earlier, state-owned NBCC had given a revised resolution plan but this was returned.