After dragging on for 583 days — against the prescribed 270-day resolution period delineated under the Insolvency and Bankruptcy Code (IBC) — ArcelorMittal finally won the Rs 42,000 crore bid for Essar Steel. While the wait has been a bit longer for Mittal, experts feel that in the next few weeks, they may several similar cases coming to a logical end, facilitating recovery of Rs 1 lakh crore for financial creditors by March-end.
“Last week, we saw some of the cases finally seeing closure. In the coming few weeks, there will be speedy decision in many such pending cases. We expect the banks to recover Rs 1 lakh crore by the end of this month,” a senior Corporate Affairs Ministry official told this publication.
On Friday, the National Company Law Tribunal (NCLT) asked Essar Steel’s Committee of Creditors (CoC) to reconsider the distribution pattern of dues. It suggested the lenders to give 15 per cent of the total offer to operational creditors. The Essar Steel case is one among the 12 large cases admitted early on under the newly formed insolvency code.
Similarly, the National Company Law Appellate Tribunal also directed the Delhi bench of NCLT to decide on JSW Steel Ltd’s bid for the debt-ridden Bhushan Power and Steel Ltd by March 31, 2019, another high-profile case.
“We expect adjudicating authority (NCLT) to decide the case at an early date to ensure that the matter is decided before the end of this financial year,” the appellate tribunal said.
Sources in the Ministry of Corporate Affairs said that while the government had kept a distance from the resolution process, a communication was sent to the tribunal to resolve the cases earlier.
“The IBC is finally settling down. Professionals are trying to work on the chinks in the code, which became visible in many long-drawn cases. While the ministry maintains a safe distance, it had, however, communicated (that) quick resolution of some cases, which are dragging for long (must be made). The creation of new benches will enable faster disposal of cases,” the MCA official further added.
Currently, there are 14 NCLT benches in the country, including the Principal Bench at New Delhi, and three recently added benches at Jaipur (Rajasthan), Kochi (Kerala) and Cuttack (Odisha).The government last week had approved establishment of two new benches of NCLT, one at Amaravati in Andhra Pradesh and the other at Indore in Madhya Pradesh.
Earlier this month, Finance Minister Arun Jaitley had announced that the Insolvency and Bankruptcy Code has so far brought close to Rs 3 lakh crore back into the banking system.
