Appellate tribunal NCLAT has upheld the NCLT order to allow Jindal Stainless to participate in the auction of debt-ridden Rathi Super Steel even after a bidder was selected.
The National Company Law Appellate Tribunal (NCLAT) said the NCLT “did not commit any error” as sales were not completed and the object was to obtain the maximisation of the assets, hence it “sees no reason to take a different view”.
“The Adjudicating Authority (NCLT) did not commit any error in taking note of the offer made by Respondent No 1 (JSL) who made an offer of initial Rs 190 crore and revised offer was Rs 201 crore i.E. Much higher than the one on which Appellant was declared successful bidder,” the NCLAT said.
Jindal Stainless Ltd (JSL) submitted its Rs 190 crore bid for Rathi Super Steel after the liquidator forwarded the application before the National Company Law Tribunal (NCLT), seeking closure of the liquidation process and approval of terms and conditions of sale to Rimjhim Ispat and Synergy Steel.
In the e-auction, Rimjhim Ispat and Synergy Steel had emerged as the highest bidder with a Rs 177.50 crore offer for Rathi Super Steel as a going concern and a letter of intent was also issued on July 1, 2021.
However, on October 3, 2021, JSL approached the NCLT and filed an application for consideration of its bid for acquiring Rathi Super Steel as a going concern. JSL had offered Rs 190 crore payable within 90 days from acceptance of the bid.
On this the Delhi-based Principal Bench of the NCLT had on September 28, 2022, directed JSL to deposit EMD (Earnest Money Deposit) of Rs 50 crore within three days of the pronouncement of this order.
The NCLT further directed to proceed to hold another auction between successful bidder Rimjhim Ispat and the other two bidders namely Adya Oversees and Bansal Wire Industries within seven days of this order.