Supreme Court to rule on 2 crucial corporate cases today
A 3-judge bench led by Justice R.F. Nariman will rule on the legality of a NCLAT decision of July 5, 2019, ordering all creditors, operational and financial, to be treated on par in sharing the proceeds from the winning bid from the sale of ailing...
A 3-judge bench led by Justice R.F. Nariman will rule on the legality of a NCLAT decision of July 5, 2019, ordering all creditors, operational and financial, to be treated on par in sharing the proceeds from the winning bid from the sale of ailing Essar Steel.
ArcelorMittal has won the bid for acquiring Essar Steel during the insolvency process. That money, over 57000 cr odd, was to be shared equally between all the creditors, the NCLAT had ruled. This was challenged in the top court by the committee of creditors as per the NCLAT order.
Standard Chartered had also appealed against the decision on the ground that it was discriminated against as an operational creditor. There was also discrimination inter se financial creditors depending on the security that they hold, the top court was told.
The court ruling in this case will further add clarity to the corporate insolvency resolution process under the IBC. Arcelor which was denied the operating profits from Essar Steel pending resolution has also challenged the order.
The order will also rule on the validity of recent amendments to the IBC brought in on Aug 16, 2019, limiting the resolution process to 330 days and the liquidation to 70 days more.
In another crucial ruling, the swansong of outgoing CJI Ranjan Gogoi, will rule on contempt pleas filed by Daiichi Sankyo Company Limited representative Vinay Prakash Singh against Indiabulls’ Sameer Gehlaut for allegedly disposing of encumbered shares of Fortis despite a court restraint.
The court had on Dec 14, 2018, ordered that status quo be maintained on sale of controlling stake in Fortis Healthcare Holding Pvt Limited to Malaysian IHH Healthcare Berhad.
The Singh brothers of Fortis also summoned in the case had instead deflected attention for the blame to Gehlaut. He sold off the encumbered shares despite being told of the court orders, they alleged. Gehlaut’s lawyers have denied the charge. They had said that the encumbered shares were sold with court permission.
But the court said that the restraint order was a blanket one – both on encumbered and unencumbered assets – to meet Fortis’ commitment not to dispose of its assets so that it could meet a Rs 4000 cr award, including interest, in favour of Daiichi in an international arbitration.
Gehlaut is facing contempt in the case. The Singh brothers name does not figure in the contempt listed for tomorrow. The other judges on the bench are Justices Deepak Gupta and Sanjiv Khanna.
Gupta will deliver the judgement.