Essar Steel has filed a petition in Gujarat High Court challenging Reserve Bank of India’s decision to refer it to the NCLT under the Insolvency and Bankruptcy code. The case will come up for hearing on July 7. While 12 companies were named by the Reserve Bank of India, according to industry sources, almost all the companies named on the list are likely to file petitions in court.
Legal sources said that some of the companies named on the list are upset with the manner in which the central bank has taken the decision. “The main issue being raised by some of these borrowers is that RBI directive to banks made an arbitrary distinction between the 12 identified companies and the rest.
While the RBI directed banks was to refer the 12 identified cases directly to NCLT, other stressed borrowers were given a six-month period to arrive at a resolution with their lenders,” said a lawyer representing one of the companies.
“Further, some borrowers have pointed out that the cut-off date of March 31, 2016, itself is arbitrary as it does not take into account the subsequent developments in the companies’ performance,” the lawyer added.
When contacted an official spokesperson for Essar said, " Essar Steel has moved the Gujarat High Court, which has posted the matter for hearing on July 7, 2017."