Allowing an appeal of Jindal Steel and Power, the National Company Law Appellate Tribunal (NCLAT) has held Arun Kumar Jagatramka, the former promoter of Gujarat NRE Coke, not eligible to negotiate with the creditors of the company.

A two-member bench of NCLAT, headed by Chairman Justice S.J. Mukhopadhaya, said Jagatramka, who was ineligible to be a resolution applicant of the company under the Insolvency & Bankruptcy Code (IBC), cannot be allowed at this stage to negotiate with the creditors of Gujarat NRE Coke.

Jindal Steel and Power, which is an unsecured creditor of Gujarat NRE Coke, had challenged an NCLT order that allowed the promoters to settle debts with its creditors.

NCLT had given a go ahead to Jagatramka for a “financial scheme of compromise and arrangement” with him and the company through its liquidator after holding the debts of shareholders and creditors.

The appellate tribunal set aside the order passed on May 15, 2018, by the Calcutta bench of the National Company Law Tribunal (NCLT). “It is clear that the promoter, if ineligible under Section 29A, cannot make an application for compromise and arrangement for taking back the immovable and movable property or actionable claims of the corporate debtor,” said NCLAT.