Supreme Court uses extraordinary power, allows ArcelorMittal-NuMetal to bid for Essar Steel

Exercising its extraordinary power under Article 142 of the Constitution, the Supreme Court on Thursday gave one more chance to ArcelorMittal and Russia's VTB Capital-backed NuMetal to bid for Essar Steel if they clear their Non-Performing Asset (NPA) dues in two weeks.

A bench comprising Justices RF Nariman and Indu Malhotra held that both the firms were ineligible under amended Insolvency and Bankruptcy Code to bid for the firm, but taking note of the plea of Committee of Creditors that it does not want liquidation of Essar Steel, granted them a fresh opportunity to bid for the firm.

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The apex court asked the Committee of Creditors to take a decision within eight weeks on rival bids of NuMetal and ArcelorMittal for Essar Steel. It also said that if nothing materialises within the stipulated eight weeks, Essar Steel should go into liquidation.

It also said that time lost in National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and apex court in dealing with cases under insolvency code shall be excluded from mandatory 270 days resolution period.

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The steel major had alleged NuMetal was not eligible to bid for Essar Steel on several grounds, including that it was a "shell company" created by a firm in which Essar group promoters had majority shares, and if they had to become eligible they would have to clear their earlier debts.

(With PTI inputs)