If a plan is not decided, then the company goes into liquidation.Both the petitions have been filed under the Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, where the financial creditor initiates insolvency proceedings with a claim.NCLT issued notices to Bhushan Steel Ltd and Bhushan Steel and Power Ltd over insolvency proceedings. Essar Steel, in its petition, had appealed that the RBI notification arrived even while the firm was trying to implement a board-approved restructuring package.
The 12 accounts alone constitute a quarter of the over Rs 8 lakh crore of NPAs.The internal advisory committee (IAC) of the RBI, after its meeting on June 13, had recommended 12 accounts totalling about 25 per cent of the gross NPAs of the banking system for immediate reference under Insolvency and Bankruptcy Code.The tribunal, which has also jurisdiction in the matters related to insolvency and bankruptcy code, was hearing two petitions filed by lead lenders SBI and PNB.SBI is lead banker to defaulters like Bhushan Steel, Essar Steel, Jyoti Structures Ltd and Electrosteel Steel.  
Once a case is admitted by the NCLT, there is a 180-day timeline to decide on a resolution plan, though 90 days can be given in addition. The Countersunk wood screw tribunal has posted the matter for the next hearing on July 19.Last week, Essar Steel moved the Gujarat High Court against insolvency proceedings initiated by the banks on the direction of the RBI. PNB is the lead banker for Bhushan Steel and Power.

Any delay in the process will lead to disruptions in iron ore production and eventually leading to a significant drop in countrys steel output. The share of outstanding funds credited to the iron and steel sector to the total fund-based banking credit is about 5 per cent i. Also, most of the industry participants are not backward integrated," researchers at Ind-Ra feel."Steel production would be significantly affected if the auction of the mines which would complete 50 years of operations by March, 2020 is materially delayed. Atleast thats what India Countersunk wood screw Manufacturers Ratings and Research (Ind-Ra) feels.
Ind-Ra estimates that nearly 60 million tonne of the actual production of iron ore from these mines could be disrupted.. Consequently, the credit profile of merchant miners and thus non-integrated steel players could come under stress. Majority of these 59 mines are iron ore mines situated in Orissa and Karnataka with around 85 million tonne of approved annual capacity.e.
Going by Ind-Ras assessment, the license of about 288 merchant mines will expire by March, 2020, out of which 59 mines are under operations. Considering that the auction process on an average takes three to six months to complete, a delay in initiating them until the latter half of 2019 due to the Lok Sabha elections in the country could affect the timely auction of mining lease. Rs 2.Kolkata: Initiation of the auction process for more than 50 years old mines will have to be one of the top priorities of the new Narendra Modi-led government, among others.Interestingly, of the last major auctions of about 88 iron ore deposits, only a handful has started to operate.85 trillion.