Mumbai, October 27: The National Company Law Tribunal (NCLT) has said that proceedings under insolvency and bankruptcy laws is to provide timely resolution to lenders. While maximisation of value is one of the objectives of the IBC, it does not mean that the resolution process can be extended indefinitely.

The NCLT made this observation in the case related to Asian Colour Coated Ispat, where JSW Steel’s offer of ₹1,500 crore emerged the top bidder. Subsequently, US-based fund Interups Inc offered ₹2,000 crore, the Hindu Business Line reported.

Approving the offer made by JSW Steel, the NCLT said tomorrow some other entity may offer 50 per cent more after seeing JSW Steel’s bid, and then there will be no end to the process.

“Time is the essence of the Code.. when a procedure and time limit is set, it is to be understood that maximisation of value of a company is to be seen within the time and procedure set out not by transgressing the jurisdiction conferred upon this Bench in dealing with issues falling under the Code,” said the NCLT.

Meanwhile, the secured financial creditors of Asian Colour Coated Ispat will receive ₹1,500 crore against the admitted claim of ₹4,864 crore, leading to a haircut of 69 per cent. Similarly, the unsecured financial creditors have to forego 99 per cent of their claim of ₹1,703 crore as they will get only ₹25 crore from the NCLT-approved resolution plan of JSW Steel.

The operational creditors (government) will get just 4 per cent or ₹10 crore out of their admitted claim of ₹220 crore, while non-government operational creditors will receive their entire claim of ₹10 lakh.

Other operational creditors have to write-off 95 per cent of their claim of ₹336 crore and make good with just ₹15 crore, as per the NCLT order issued on Tuesday.

In fact, of the overall admitted operational creditors claim of ₹556 crore, they will recover just ₹25 crore or 4.50 per cent after waiting for almost two years since the company was admitted for insolvency proceedings.

In all, the creditors of Asian Colour Coated will recover ₹1,550 crore or 22 per cent of the admitted claim of ₹7,123 crore.

Last Monday, the NCLT had approved JSW Steel resolution plan with modification. On Tuesday, it released the final written order, clearing the uncertainty on the modification made and paving the way for the execution of the resolution plan.

All creditors will be paid within 30 days by JSW Steel.

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