Calcutta: Renaissance Steel India Pvt Ltd has filed a petition before the National Company Law Tribunal (NCLT) challenging the eligibility of Vedanta Ltd to bid for Electrosteel Steels Ltd (ESL).

Inicidentally, Vedanta has emerged as the highest bidder for debt-laden ESL.

Renaissance sought the direction of the court to prevent the resolution professional (RP) from negotiating further with Vedanta on its plan to revive ESL. Renaissance claimed Vedanta as well as Tata Steel, which had also participated in the bid to acquire ESL, are ineligible under the provisions of Insolvency & Bankruptcy Code (IBC), 2016.

The matter is expected to come up for hearing on Thursday.

According to Renaissance Steel, Vedanta Ltd was held guilty in an environmental issue in Zambia that carried potential imprisonment of three years.

It also alleged that Scunthorp Steel, the UK subsidiary of Tata Steel, which emerged as the second highest bidder for ESL, was involved in an industrial accident that carried imprisonment up to two years.

"According to our understanding, if any company or its subsidiary, associate or anyone connected or related to it, is convicted of any offence that carries provision of punishment of two years or more, the said company cannot be a resolution applicant for stressed asset under the IBC. What matters is conviction and not the punishment itself because that depends on many other factors. On those counts, Tata Steel and Vedanta Ltd are ineligible," Abhishek Dalmia, chairman of Renaissance Group, told The Telegraph.

Vedanta Ltd did not respond to the issues raised by Renaissance till the time of going to press. Tata Steel declined to comment citing a non-disclosure agreement.

Renaissance Steel had offered to pay Rs 6,000 crore in a combination of upfront and interest carrying deferred payment, Dalmia said. However, the lenders are willing to back a bid that carry a higher upfront payment. ESL, promoted by Kejriwal family-owned ductile iron pipe maker Electrosteel Castings Ltd, owes over Rs 11,000 crore to banks and financial institutions.

Renaissance alleged it approached the NCLT after raising the issue of ineligibility multiple times with the RP and the lenders. It first raised the matter during a meeting on January 31, 2018 in the presence of their legal adviser from Shardul Amarchand Mangaldas.

It then approached the committee of creditors on February 3, 2018. Further the legal counsel of Renaissance had sent a reminder to the RP on February 20, 2018 but the RP declined to share anything about their eligibility citing confidentiality vide mail dated February 26, 2018, the company in a statement said.