NCLAT Drops Jindal Stainless Plea Over Mittal Corp, Asks To Approach NCLT

Insolvency appellate tribunal NCLAT has dismissed the plea of Jindal Stainless Ltd, one of the bidders for debt-ridden Mittal Corp, challenging the issuance of a fresh Request for Resolution Plan (RFRP) by the lenders.

A two-member NCLAT bench observed the lenders of Mittal Corp were "empowered to issue fresh RFRP" when none of the resolution plans had been approved by the committee of creditors (CoC).

The lenders have already approved the bids of rival Shyam Sel and Power Ltd (SSPL) and an application has already been moved by the Resolution Professional (RP) before the Mumbai bench of the National Company Law Tribunal (NCLT) seeking its approval.

NCLAT said issues raised by Jindal Stainless subsequent to February 10, 2023, when RFRP was issued, need no consideration.

The tribunal further added it is open for Jindal Stainless to file an objection over the application filed by the RP before NCLT for approval of SSPL bid.

The appellate tribunal said that its previous order of January 18, 2023, directing the RP of Mittal Corp to initiate a fresh voting process on the resolution plans received has been complied.

NCLAT observed that all resolution plans including those of Jindal Stainless and SSPL were put before the CoC in its meeting dated January 25, 2023, and the voting result was declared on February 10, 2023.

"We are of the view that consideration of all resolution plans and voting on the plans by the CoC as per direction of this tribunal dated January 18, 2023, cannot be said to be non-compliance of the order of this tribunal. When none of the resolution plans was approved, the CoC under the CIRP Regulations was empowered to issue fresh RFRP.

"We, thus, do not find any error in the order of the Adjudicating Authority (NLCT) refusing the prayers of the appellant to reissue RFRP and reinitiate the voting process," said NCLAT.

On January 18, 2023, the National Company Law Appellate Tribunal (NCLAT), over a plea by Jindal Stainless had set aside an NCLT order, which had permitted rival SSPL to submit a revised bid, even after the voting of the CoC had commenced on August 7, 2022.

It had directed the RP to initiate a fresh voting process over the bids and complete the process within one month.

This issuance of RFRP was earlier challenged by Jindal Stainless before the NCLT on February 14, 2023, requesting to rescind the process. An order was passed by NCLT on February 20, 2023, rejecting it, though the order was made available on February 27, 2023.

Jindal Stainless submitted that the CoC ought not to have proceeded to approve any resolution plan submitted in response to RFRP dated February 10, 2023.

However, NCLAT observed after issue of fresh RFRP on February 10, 2023 although other resolution applicants submitted their resolution plans but that Jindal Stainless did not submit a plan, and instead filed plea against it before the NCLT.

NCLAT said: "Subsequent events which took place after February 10, 2023 are not subject matter of this appeal and needs no consideration by this tribunal."

The NCLAT also observed that the RP has already filed an application before NCLT for approval of a resolution plan.

"It is open for the appellant to file an appropriate application/objection... , the issues raised by the appellant subsequent to 10.02.2023 need no consideration, as observed above," said NCLAT.

NCLAT also made it clear that it has not expressed any opinion or objections which are to be raised by Jindal Stainless.

"... it is for the Adjudicating Authority to consider the same in accordance with law. Subject to liberty as above, this appeal is dismissed," it said.