1 week ago
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The State government has decided to appeal against the National Company Law Tribunal’s (NCLT) order to hand over the Steel Authority of India’s steel complex at Cheruvannur in Kozhikode to Chhattisgarh Outsourcing Services Limited.
Industries Minister P. Rajeeve said that the appeal would be based on the facts that the tribunal order on May 2 was issued without hearing the State government’s side and in violation of the lease conditions fixed by the government.
The Steel complex, which was ordered to be handed over, is a joint venture between the Steel Authority of India (SAIL), a central public sector unit (PSU), and Steel Complex Limited, a State PSU. The order to hand over the company was made under a resolution plan filed by Chhattisgarh Outsourcing Limited, citing default in repayment of a loan of ₹45 crore taken by the firm in 2013 from Canara Bank.
Alleging default in loan repayment, the bank approached the NCLT, which issued the order. The company partially ceased operations in 2014, and has been completely out of business since December 2016.
According to a statement from the Industries Minister’s office, the land occupied by the steel complex was included as part of the debt without following the conditions set by the State government. The government had intervened to resolve the issue even before the case came before the tribunal.
The Industries Minister had held three meetings with Canara Bank officials to resolve the issue. The bank had also assured that the case would be considered for an one time settlement scheme. Mr. Rajeeve, in his statement, said that it is mysterious that the bank accepted the resolution plan that recovers only a small part of the liability. The order came at a time when other measures to resolve the issue were also in progress.
The SAIL, also showed little interest in protecting the plant, although it was a joint venture. The government had also communicated with the SAIL chairman in this regard. The SAIL later announced that it was withdrawing from the joint venture.
