INSUBCONTINENT EXCLUSIVE:
New Delhi: The Supreme Court judgement on the Essar Steel case has clearly laid down the roles of the committee of creditors (CoC) and the
adjudicating authority, and accepted that financial and operational creditors are distinct and cannot be equated, said a senior government
official.
Finance minister Nirmala Sitharaman, meanwhile, said the verdict had reinforced the credibility of the Insolvency and Bankruptcy
The official said the court had recognised the need for timebound resolution even though it had relaxed the 330-day limit for resolutions
under the IOC, leaving room for exceptional cases to take longer if required.
Government is fully satisfied with the Supreme Court judgement
It clearly lays down the respective jurisdictions of the adjudicating authority and the committee of creditors,-Injeti Srinivas The Supreme
Court on Friday set aside the judgement by the National Company Law Appellate Tribunal (NCLAT) which had equated all creditors, providing
for the recovery of around 60.7% of dues for both financial and operational creditors.
The top court upheld the recent amendment to the IBC,
Supreme Court judgement on Essar Steel
While there should be fair and equitable treatment of all traders, the court has accepted the view that operational and financial creditors
cannot be equated, he said
decision was along expected lines and that rules prescribed relating to the functioning of courts were generally taken as directory and not
mandatory.
Experts said the ruling clarified the limits of judicial review and left commercial decisions in the hands of the committee of
The CoC has to enter into negotiations with the resolution professional and the resolution applicant and look at the health of the company