The Gujarat High Court on Monday dismissed Essar Steel’s petition against the Reserve Bank of India (RBI).
Essar Steel had challenged the RBI’s directive to lenders to refer the debt-laden company to National Company Law Tribunal. The company had moved the court against proceedings and a special bench on July 4 had posted the case for hearing on July 7.
No relief will be given to the debt-laden company with respect to the Insolvency and Bankruptcy Code (IBC), the court said.
In its defence, the RBI had clarified that Essar Steel was not the only company singled out for insolvency proceedings. All the big defaulters with Rs 5,000 crore outstanding loans will be subjected to the process in order to reduce the mounting bad loans in the system.
Essar Steel is amongst the 12 stressed companies that RBI has shortlisted for insolvency proceedings. The Internal Audit Committee (IAC) of the central bank referred these companies on June 13.
The company has a debt of nearly Rs 42,000 crore. While arguing the case in Gujarat HC, the central bank’s counsel Darius Khambatta also said that the non-performing assets (NPAs) of Essar Steel rose from Rs 31,671 crore on March 31, 2016 to Rs 32,864 crore on March 31 this year.
Source Link – Money Control