ARCELORMITTAL INDIA PRIVATE LIMITED versus SATISH KUMAR GUPTA & ORS.

Citation: [2018] 12 S.C.R. 362 · Decided: 04-10-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Disposed off

Cited by 15 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2018] 12  S.C.R.
ARCELORMITTAL INDIA PRIVATE LIMITED
v.
SATISH KUMAR GUPTA & ORS.
(Civil Appeal Nos. 9402-9405 of 2018)
OCTOBER 4, 2018
[R. F. NARIMAN AND INDU MALHOTRA, JJ.]
Insolvency and Bankruptcy Code, 2016: s.29A – Issue relates
to ineligibility of resolution applicants to submit resolution plans
after the introduction of s.29A into the Code – Petition filed under
the Code for financial debts owed to the financial creditors-Banks
by the corporate debtor ESIL for Rs.45,000 crores – RP (Resolution
Professional) invited an expression of interest from potential
resolution applicants – Appellant (AMIPL) and one entity Numetal
submitted expression of interest – Submission of resolution plan by
AMIPL and Numetal – RP found both AMIPL and Numetal ineligible
under s.29A – RP held that AM Netherlands mentioned as a
connected person of AMIPL was disclosed as a promoter of Uttam
Galva which was declared as a NPA – Similar was the situation of
Numetal – AMIPL and Numetal challenged the order of  RP before
Adjudicating Authority (NCLT) – On 2.4.2018, pursuant to the  RP’s
invitation, fresh resolution plans submitted by AMIPL,  Numetal and
one other entity ‘Vedanta’ – On 19.4.2018, NCLT passed order in
all the IAs, wherein it first held that there was no patent illegality in
the decision of RP for declaring ineligibility of applicants – It then
went on to hold that RP ought to have produced both the resolution
plans before the Committee of Creditors (CoC) and to follow the
provision of s.29A(c) r/w s.30(4) for affording opportunity to the
resolution applicants before declaring them ineligible and, therefore,
remanded back the matter to RP and CoC on this ground – Pending
appeals before NCLAT, on 8.5.2018, CoC disqualified AMIPL and
Numetal – On 7.9.2018, NCLAT held that at the time of first resolution
plan by Numetal, one of the shareholders being ‘AEL’ was related
party and therefore, Numetal was not eligible to submit resolution
plan in terms of s.29A and that on 29.3.2018, as the AEL was not
the shareholder of Numetal and all the three shareholders being
eligible, Numetal was eligible – Therefore, resolution plan submitted
[2018] 12  S.C.R. 362
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by Numetal to be considered by CoC to find out its viability – As
regards AMIPL, order of NCLT was affirmed subject to condition
that AMIPL shall make payment of all overdue amount with interest
thereon and charges relating to NPA of both the “Uttam Galva”
and “KSS Petron” within three days – Instant appeals filed by AMIPL
and Numetal – Held: The ingredients of sub-clause (c) of s.29A are
that, the ineligibility to submit a resolution plan attaches if any
person, as is referred to in the opening lines of s.29A, either itself
has an account, or is a promoter of, or in the management or control
of, a corporate debtor which has an account, which account has
been classified as a non-performing asset, for a period of at least
one year from the date of such classification till the date of
commencement of the corporate insolvency resolution process – If
it is shown, on facts, that, at a reasonably proximate point of time
before the submission of the resolution plan, the affairs of the
persons referred to in s.29A are so arranged, as to avoid paying
off the debts of the non-performing asset concerned, such persons
must be held to be ineligible to submit a resolution plan – In the
instant case, since both the resolution plans  even on 2.4.2018,
were hit by s.29A(c), and since the proviso to s.29A(c) will not apply
as the corporate debtors related to AMIPL and Numetal have not
paid off their respective NPAs, ordinarily, these appeals would be
disposed of by merely declaring both resolution applicants to be
ineligible under s.29A(c) – However, in order to do complete justice
under Art.142 of the Constitution of India, one more opportunity is
given to both resolution applicants to pay off the NPAs of their
related corporate debtors within a period of two weeks in
accordance with the proviso to s.29A(c) – If such payments are
made within the said period, both resolution applicants can resubmit
their resolution plans dated 2.4.2018 to CoC, who are then given a
period of 8 weeks to accept, by the requisite majority, the best
amongst the plans submitted, including the resolution plan submitted
by Vedanta – In the event that no plan is found worthy of acceptance
by the requisite majority of the CoC, the corporate debtor, i.e. ESIL,
s

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