In an unprecedented turn of events fraught with challenges and various upheavals, the National Company Law Tribunal (NCLT), Hyderabad Bench, has granted its approval for the groundbreaking Resolution Plan submitted by Jindal Saw Limited (JSL), a flagship company of the P.R. Jindal Group. This momentous decision allows for the merger of SathavahanaIspat Limited (SIL), the Corporate Debtor, with JSL, creating a dynamic synergy between the two businesses that will undoubtedly enhance JSL’s market presence and operations.

Both JSL and SIL are listed on NSE and BSE, and this extraordinary merger is a monumental victory for JSL. JSL, a leading manufacturer of submerged arc and spiral welded pipes for various industries, will benefit immensely from SIL’s expertise in producing and selling pig iron and ductile iron pipes. The fusion of these two giants will amplify JSL’s manufacturing capabilities, solidifying its position within the industry.

The approval of this Resolution Plan comes after a tumultuous journey, as JSL’s eligibility was persistently challenged by multiple Operational Creditors, including Trimex Industries Pvt. Ltd. (Trimex), a Prospective Resolution Applicant., who dogged challenges to JSL’s eligibility on two separate occasions, asserting that JSL is a related party under Section 29A of the Insolvency and Bankruptcy Code (IBC) and therefore ineligible to submit a resolution plan. For one such Application of Trimex, Special Bench was constituted at Cuttack due to divergent opinion between the Judicial Member and Technical Member of Hyderabad Bench of NCLT however the Application was finally rejected by the Hyderabad Bench of NCLT.

Trimex has challenged the order of NCLT Hyderabad of rejecting its applicationbefore  the Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) and NCLAT, Chennai Bench directed Trimex to present its grievances before the NCLT. In the end, the NCLT dismissed Trimex’s objections filed by way of second application, cementing JSL’s eligibility to submit the resolution plan by imposing an exemplary cost of Rs. 5 Lakhs for filing frivolous applications that consumed the Tribunal’s valuable resources and time.

In a notable development, a motivated Public Interest Litigation (PIL) [Writ Petition(C) 979 of 2022] was filed before the Supreme Court in a bid to derail JSL’s resolution plan. However, the Supreme Court dismissed the PIL. On a later occasion, an application by operational creditor Maa Tara Enterprises to stall JSL’s plan was also rejected with costs.

SIL entered the Corporate Insolvency Resolution Process (CIRP) in 2019, with several potential bidders, including Sarda Mines Limited, Vedanta Limited, Welspun Corp Limited, KhandwalaFinstockPvt. Limited, Trimex Industries Pvt. Ltd., and ARES SSG Capital Management (Singapore) Pte Limited, vying to become Prospective Resolution Applicants (PRA). Ultimately, only Vedanta Limited and Jindal Saw Limited submitted resolution plans. JSL’s superior bid surpassed Vedanta Limited’s offer of Rs. 620 Crore to creditors, including an upfront payment to financial creditors. Consequently, JSL’s Resolution Plan received unanimous approval, with 100% votes from the Committee of Creditors (CoC).

Throughout this arduous process, JSL’s legal representation was provided by a team of experts from S&A Law Offices, New Delhi led by Vijay K Singh, Sr Partner (Litigation)& Daizy Chawla, Sr. Partner (Corporate) who effectively advocated for the company before the NCLAT in Chennai, NCLT in Cuttack (Special Bench), and NCLT in Hyderabad.

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