Three days after the Gujarat High Court gave a much-needed boost when it dismissed Essar Steel's plea against initiation of bankruptcy proceedings to recover debt worth about Rs 37,000 crore, the designated court to deal with chronic defaulters will take up the case of two other borrowers — Amtek Auto and ABG Shipyard — who together owe about Rs 21,000 crore.
A report by the Mint said the National Company Law Tribunal (NCLT) will hear on Thursday applications filed by ICICI Bank and Corporation Bank, against the two borrowers who are among the 12 defaulters identified by the Reserve Bank of India (RBI) for initiating insolvency proceedings.
Also read: List of India's top 12 defaulters who owe a mind-boggling amount to banks
With the two cases, the number of defaulters dragged to the NCLT now stands at six, including Jyoti Structures, Monnet Ispat & Energy and Alok Industries.
While ICICI Bank's application against ABG Shipyard will be heard at the Ahmedabad bench of the NCLT, the Chandigarh bench will hear the case against Amtek Auto filed by Corporation Bank.
On Monday, the Gujarat bench of the NCLT dismissed Essar Steel's appeal against the RBI's June 13 order that directed the commercial banks to initiate insolvency proceedings against the 12 defaulters and that these cases will be taken up on priority by the NCLT.
News agency Reuters said the Gujarat bench's ruling cleared the decks for commencing bankruptcy proceedings against Essar Steel, though the company has the option of challenging the ruling if it wants to.
Though earlier reports had estimated the amount owed by the company at Rs 37,000 crore, Reuters pegged the amount at Rs 45,000 crore, or $6.99 billion, citing a Mint report.
The 12 defaulters owe almost 25 percent of the overall gross NPAs of about Rs 8 lakh crore (Rs 7.7 lakh crore, according to some estimates) belonging to banks.
