The two companies are required to submit their resolution plans eight weeks thereafter.
ArcelorMittal has to clear Rs 7,000 crore dues of Uttam Galva and KSS Petron for its bid to be eligible for Essar Steel.
A two judge bench comprising Justices R.F. Nariman and Indu Malhotra held that their resolution plans would be considered by the majority (66%) of committee of creditors (CoC) and if they do not come to a conclusion, then Essar Steel Ltd would go into liquidation.
The court also diluted the role of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) and said that they would step in only after resolution plans were approved by a CoC majority.