NCLT pulls up resolution professional for Electrosteel

NEW DELHI: Adding a fresh dimension to the ongoing insolvency cases, the

National Company Law Tribunal

(

NCLT

) on Tuesday ordered the resolution professional dealing with Electrosteel Steels to communicate the reasons for deciding the eligibility of two bidders — Tata Steel and Vedanta — in three days to

Renaissance Steel

India, which had challenged the decision.


NCLT’s Kolkata bench also said the resolution professional should record the reasons for deciding on any issue during the course of the process to select a resolution applicant for a company facing insolvency. It then went on to pull up the resolution professional for not providing proof in support of his decisions. Resolution professionals and bankers said that this will set a precedent for other cases and make the documentation more robust.

Renaissance Steel was among the four bidders for Electrosteel and had challenged the eligibility of the other bidders under section 29(A) of the Insolvency and Bankruptcy Code, arguing that Vedanta and Tata Steel had been found to be guilty in cases related to their operations in Zambia and the UK, respectively. The insolvency court has given Renaissance three days to file its objections after it receives the information from the resolution professional.

Provisions of the Insolvency and Bankruptcy Code, which came into force a little over a year ago, are being tested and the law, which has already been amended once and an expert committee is looking into the possibility of further amendments, is seen to be evolving.