The National Company Law Appellate Tribunal on Friday refused to stay a bankruptcy court order approving steel giant ArcelorMittal's Rs 42,000 crore takeover bid for Essar Steel and sought a fresh plan for the distribution of bid amount between financial and operational creditors of the debt-laden firm. Essar Steel directors had challenged Ahmedabad-bench of National Company Law Tribunal's (NCLT) nod to global steel giant ArcelorMittal SA's bid for the debt-laden company on the plea that their offer of Rs 54,389-crore was superior as it clears 100 per cent outstanding of both financial and operational creditors.

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Standard Chartered too moved the NCLAT against the plan as its counsel contended that the bank was being given only 1.7 per cent of its total dues from Essar Steel while other financial creditors, forming part of the CoC, were getting over 85 per cent of their dues.

A two-member bench headed by Justice S J Mukhopadhaya refused to stay the NCLT nod to ArcelorMittal's resolution plan and posted the matter for March 18. It also asked State Bank of India-led CoC to bring a fresh distribution plan at the next date of hearing, saying "there cannot be any discrimination... All are equal".

Making a suggestion, the NCLAT said all operational creditors below Rs 1 crore should get 100 per cent of the dues and so should the employees of Essar Steel. Only 90 per cent of Rs 42,000 crore should be allowed for financial creditors.

ArcelorMittal's Resolution Proposal involves financial creditors getting Rs 41,987 crore out of their total dues of Rs 49,395 crore. Operational creditors, under the plan, would get just Rs 214 crore against the outstanding of Rs 4,976 crore.

If the ArcelorMittal plan is implemented, Standard Chartered will only get Rs 60 crore against its claims of Rs 3,187 crore from Essar Steel.

The NCLAT bench asked the Committee of Essar Steel lenders to come up with a distribution plan by Monday saying it cannot discriminate on the basis of secured and unsecured creditors.

It was of the view that the Committee of Creditors (CoC) cannot reserve 92 per cent of the bid amount for financial lenders and leave just 4 per cent for operational creditors.

Operational creditors, it felt, are the oppressed lot and cannot be handed out just 4 per cent of their outstanding.

If CoC doesn't act to clarify in favour of operational creditors, NCLAT will exercise powers available to it, the judges said.

The CoC, however, opposed proposal to give 10 per cent of the Rs 42,000 crore bid amount to operational creditors saying they had approved the ArcelorMittal bid for Essar Steel based on the money secured lenders are able to recover from the insolvency.

Without the recovery for secured lenders, the CoC wouldn't have approved the plan, the counsel appearing for the committee said adding it cannot be a lottery system for operational creditors.

Financial creditors would be left with Rs 37,800 crore if 10 per cent is given to operational creditors.

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On Thursday, the appellate tribunal had told Essar Steel Asia Holdings (ESAH) that its Rs 54,389-crore resolution plan would only be considered only if the entity cleared the Essar's entire bad debt.