New Delhi, Jan 30 (IANS): Given the Supreme Court's recent ruling on the prospect of promoters regaining control of their insolvent assets, the race for bankrupt Essar Steel may be far from over despite the National Company Law Tribunal (NCLT) rejecting Ruias' plea on Tuesday.

Last December, the apex court in an order on the insolvency proceedings of Chennai-based Brilliant Alloys ruled that the promoters of the company can withdraw from bankruptcy proceedings in lieu of payment of outstanding dues at any stage of the proceedings.

The Chennai bench of NCLT had turned down the promoters' plea citing clause 30A of the Insolvency and Bankruptcy Code (IBC) that says resolution process cannot be withdrawn after the Committee of Creditors (CoC) has issued invitation for expression of interest.

However, the Supreme Court bench of Justice Rohinton Fali Nariman and Justice Navin Sinha, in their order on December 14, said: "According to us, this regulation has to be read along with the main provision Section 12A which contain no such stipulation."

Though the order may help Ruias in presenting their case, there is an important caveat. The Section 12A allows withdrawal of bankruptcy proceedings only with the approval of 90 per cent of the CoC. Ruias may remind the CoC that their bid is higher by Rs 12,000 crore.

Further, as per the IBC regulations, the withdrawal of insolvency proceedings against a firm has to be sought by the one who initiated it. And, in the case of Essar Steel, the State Bank of India (SBI) had dragged the steelmaker to the bankruptcy court.

In another case related to insolvency proceedings of Unimark Remedies, the Mumbai bench of NCLT on December 21 ruled that the CoC cannot refuse a bid even if it comes after the deadline. The petition was filed by Omkara Assets Reconstruction whose bid was rejected.

Essar promoters through Essar Steel Asia Holdings had submitted their bid of Rs 54,389 crore to pay off all dues and regain control of Essar Steel after the CoC had approved the Rs 42,202-crore resolution proposal of ArcelorMittal in October last year.

Essar Group, in a statement after Ahmedabad bench of NCLT rejected their plea on Tuesday, said: "We continue to believe that our offer of Rs 54,389 crore is the most compelling proposal available to Essar Steel creditors."

It said the Group submitted the proposal under the recently introduced Section 12A of the IBC, and the recent judgement of the Supreme Court has established that the section's provisions are applicable retrospectively.

"We are awaiting a copy of the full NCLT order and will take a call on next steps after we have thoroughly gone through the contents," it said.