Reconsider proportion of distribution of money among creditors of Essar, NCLAT tells CoC

Reiterating that there is no stay on the approval granted to ArcelorMittal’s resolution plan for Essar Steel, the NCLAT today clarified that the resolution plan has to be implemented “in the letter and spirit” of the order passed by the NCLT, Ahmedabad Bench..Therefore, as suggested by the NCLT in its order, before disbursing the money, a meeting of the Committee of Creditors (CoC) will be called to reconsider the proportion of distribution of money among the financial and operational creditors of Essar Steel..A two-member Bench headed by Chairperson Justice Mukhopadhyay was hearing an application moved by Standard Chartered Bank seeking to stop the distribution of the money to creditors of Essar Steel..NCLAT had earlier this week given a conditional nod to ArcelorMittal’s resolution plan for debt-ridden Essar Steel. It had thus directed the Resolution Professional to implement ArcelorMittal’s Resolution Plan in accordance with law..Standard Chartered Bank, had challenged that March 8 order of the NCLT, Ahmedabad Bench approving ArcelorMittal’s resolution plan for Essar Steel, on the ground that the approval process adopted by the CoC was illegal and that the plan was discriminatory..The three erstwhile Directors of Essar Steel, Prashant Ruia, Dilip Oommen, and Rajiv Bhatnagar, also moved the Appellate Tribunal against the approval of ArcelorMittal’s resolution plan..Senior Advocate Kapil Sibal appeared for Standard Chartered..Senior Advocate Arun Kathpalia appeared for the lead banker SBI and a few other financial creditors of Essar Steel..The matter will be next heard on March 27.