Gujarat High Court Asks RBI To Delete A Line From Its Insolvency Directive
By Team Legistify / 2017-07-11

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The Gujarat High Court asked the Reserve Bank of India (RBI) to drop a line its June 13 directive to send 12 large corporate accounts for immediate action under the Insolvency and Bankruptcy Code.

In an earlier hearing, the Gujarat High Court had asked the central bank to explain the part of its statement that read “such cases will be accorded priority by the National Company Law Tribunal (NCLT)”.

The high court on Friday asked the central bank to drop this line while hearing Essar Steel’s petition against the insolvency proceedings initiated by lenders. The court also stayed all insolvency proceedings against the company till July 12 when it will hear the matter once again.

In response to the court’s directive, the regulator said it will issue a corrigendum to its June 13 circular ahead of the next hearing.

Essar Steel had recently moved the Gujarat High Court against insolvency proceedings initiated against it by the company’s lead lender State Bank of India and foreign lender Standard Chartered Bank, in two separate filings.

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