# In the matter of Essar Steel Ltd. C.P. (I.B) No. 40-7-NCLT-AHM-2017 (Interim Order)

> NCLT judgment dated 2018-02-07. Citation: TCN-2018-NCLT-01865. The case involves a dispute over the ownership of a slurry pipeline asset of Essar Steel India…

- **Court:** NCLT
- **Order date:** 7 Feb 2018
- **Citation:** TCN-2018-NCLT-01865
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/essar-steel-ltd-cp-ib-no-40-7-nclt-ahm-2017-interim-order-fec20c20

## Summary

### Background

The case involves a dispute over the ownership of a slurry pipeline asset of Essar Steel India Limited (Corporate Debtor) which is undergoing Corporate Insolvency Resolution Process (CIRP). Essar Steel had entered into a Business Transport Agreement (BTA) with Odisha Slurry Pipeline Infrastructure Limited (Respondent No. 1) for the transportation of slurry. Subsequently, a Right to Use Agreement (RTUA) was also executed. Later, a Deed of Cancellation was entered into to cancel the BTA and RTUA. However, SREI Infrastructure Limited (Respondent No. 2), a lender to Respondent No. 1, objected to the cancellation. A civil suit was filed by Respondent No. 2 challenging the cancellation. The Resolution Professional of Essar Steel filed an application (IA 419 of 2017) seeking

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## Facts

Essar Steel India Limited (ESIL), the Corporate Debtor, entered into a Business Transport Agreement (BTA) dated 27.02.2015 with Odisha Slurry Pipeline Infrastructure Limited (OSPIL), Respondent No. 1, for pipeline transportation of slurry between Dabuna and Paradeep in Odisha for Rs. 4000 crores. Clause 2.3 of the BTA outlined the purchase consideration payment terms. On 30.03.2015, ESIL entered into a Right to Use Agreement (RTUA) with OSPIL, allowing OSPIL to use the pipeline's capacity for 20 years, with ESIL receiving usage charges. OSPIL also executed loan agreements on 28.03.2015 to finance the purchase consideration. On 31.08.2015, an addendum to the RTUA was executed, linking pipeline usage charges to the purchase consideration paid by OSPIL. A Deed of

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority (NCLT) has jurisdiction under Section 60(5) of the Insolvency …

**Ratio:** Section 60(5) of the IBC provides the NCLT with jurisdiction to entertain or dispose of

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**Reasoning:** The NCLT reasoned that the claim regarding the ownership of the pipeline asset is a

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**Interpretation:** The interpretation of Section 60(5) is broad, encompassing any question of law

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**Application:** The NCLT applied this interpretation to the facts of the case, holding that the

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Manorama…
- **Appellants:** IDBI Bank…
- **Respondents:** Essar Steel India…; Odisha Slurry…

## Timeline

- **2015-02-27 — Business Transport…**: Essar Steel India Limited entered into a BTA with Odisha Slurry Pipeline Infrastructure…
- **2015-03-30 — Right to Use Agreement…**: Essar Steel India Limited entered into a RTUA with Odisha Slurry Pipeline Infrastructure…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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