Tata Steel Limited v. Liberty House Pte Group. Ltd. [CA (AT) (Insolvency) 198 of 2018] - Synopsis
Team SoOLEGAL 24 Nov 2020

Following the acceptance of the JSW Steel resolution proposal in Bhushan Power & Steel Limited, Tata Steel Limited, one of the resolution applicants questioned the submission of an enhanced financial bid. In Tata Steel Limited v. Liberty House Pte Group. Ltd. [CA (AT) (Insolvency) 198 of 2018], Tata Steel Limited claimed that the National Corporate Law Tribunal (NCLT) could not include a range of options for settlement applications at a later stage after the submission of the resolution proposal.
In the case of the Corporate Insolvency Resolution Process (CIRP) of Bhushan Power & Steel Limited, three resolution proposals were submitted. The Liberty House Group Pte. Ltd., one of the resolution applicants, was granted multiple chances to include the required documentation according to the pre-qualification requirements, including the secrecy affidavit. In the present case, Tata Steel Limited challenged the decision of NCLT to allow Liberty House to send a resolution proposal. NCLT held that Liberty House's resolution proposal could not be refused on the basis that it lags in the process documents or any other documents distributed internally by the resolution specialist or the committee of creditors’(CoC). Similarly, after the submission of the settlement proposal, JSW Steel submitted an enhanced financial bid. At the meeting of the CoC, Tata Steel Limited submitted an opposition and the CoC allowed all three resolution applicants to send revised financial offers. Tata Steel Limited reported that changes had been made amid the fact that Tata Steel had been declared the top bidder.
The National Company Law Appellate Tribunal (NCLAT) dismissed the claims put forward by Tata Steel Limited and directed the NCLT to consider the approved resolution proposal by voting for the representatives of the CoC. NCLAT, when agreeing on the viability of sending a revised financial bid, has decided that CoC is empowered to take them into account. It noted that it was available to the Company of Creditors to review the effectiveness, sustainability, and financial matrix of the 'Resolution Proposals' taking into account the 'Revised Financial Deals' and to make the same decisions in compliance with the statute. The NCLAT held that the NCLT should recognise the authorised resolution plan of JSW Steel according to Section 31 of the Insolvency and Bankruptcy Code, 2016. 


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