ArcelorMittal India Private Limited Vs. Satish Kumar Gupta, Supreme Court had interpreted section 29A of Insolvency and Bankruptcy Code, 2016 - Synopsis
Team SoOLEGAL 19 Oct 2020

In this particular case, ArcelorMittal India Private Limited Vs. Satish Kumar Gupta, Supreme Court had interpreted section 29A of Insolvency and Bankruptcy Code, 2016, and also Supreme Court had used its extra-ordinary power under Article 142 of the India Constitution. The main incident which had taken place in this case is that Corporate Insolvency Resolution Process was started against a company known as Esser Steel India Limited and for that, a Resolution Professional had also been appointed (Satish Kumar Gupta) herein as the respondent. The respondent called for a resolution plan from interested parties and two companies ArcelorMittal India Private Limited and Numetal Limited had submitted their resolution plan, but their resolution plans were not accepted by the respondent because the companies ArcelorMittal India Private Limited and Numetal Limited were not eligible to submit resolution plan under section 29A of IBC. According to this section every person who wants to apply a resolution plan, whether he or it does so acting jointly or in combination with other individuals, whom a person or other person manages or governs or promotes a corporate debtor who is listed as a non-performing asset and whose debts have not been repaid for a period of at least one year prior to the commencement of a corporate insolvency settlement, then that person is not eligible to submit a resolution plan.
In this particular case ArcelorMittal India Private Limited, in their resolution plan had shown that it had a connected person with ArcelorMittal Netherlands and it was also disclosed that ArcelorMittal Netherlands is the promoter of Uttam Galva Steels Limited whose account has been classified as a non-performing asset hence, not eligible to file resolution plan. Numetal Limited was also found ineligible under Section 29A of IBC. ArcelorMittal India Private Limited and Numetal had filed a petition in NCLT against the Resolution Professional and also had challenged the order of the respondent. NCLT dismissed the petition by stating that Resolution Professional had passed the above-mentioned order after consulting the legal advisers. Being aggrieved the petitioner further appeal to NCLAT. However, NCLAT also dismissed the application. As a result, the petitioner appealed to the Supreme Court of India.
According to Supreme Court, if a company wanted to submit a resolution plan jointly with others, then the company must clear all the debt of the corporate debtor for becoming eligible under Section 29A(c) of IBC. Supreme Court had rejected the application of the petitioner however, the Court had imposed its extra-ordinary power under Article 142 of the Indian Constitution by granting an opportunity to the petitioner to pay off the debts of their related corporate debtors within the period of two weeks. Court also held that if such payments are made within a period of two weeks, both resolution applicants may resubmit their resolution plans to the Creditors' Committee, which is required to consider and decide within eight weeks from the date of the judgment. In the case that the Creditor Committee fails to take such a vote by the required majority, ESIL shall be liquidated.

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