Supreme Court Issues Notice On Challenge To Gujarat HC Ruling Against Transfer Of Essar Steel Cases To Mumbai NCLT
The Supreme Court on Monday issued notice on the Union government's challenge to a Gujarat High Court judgment concerning the transfer of Essar Steel-related proceedings from the National Company Law Tribunal (NCLT) Ahmedabad to Mumbai.
A bench of Chief Justice Surya Kant and Justice V. Mohana tagged the matter with connected cases raising similar issues and posted it for hearing on July 29.
The challenge arises from a February 17, 2026 judgment of a Division Bench of the Gujarat High Court, which declined to examine the merits of the Union's appeal against a Single Judge decision quashing recusal orders passed by NCLT Ahmedabad benches and the subsequent transfer of the proceedings to Mumbai.
The division bench had observed that the Supreme Court was already considering questions arising from the single judge's ruling. It therefore left all issues open for consideration by the apex court and disposed of the appeal without entering into the merits.
Background
The litigation arose from the long-running insolvency proceedings of ArcelorMittal Nippon Steel India Limited (formerly Essar Steel India Ltd). After the resolution plan submitted by ArcelorMittal was approved by the NCLT Ahmedabad on March 8, 2019, affirmed by the NCLAT on July 4, 2019 and substantially upheld by the Supreme Court on November 15, 2019, several operational creditors and related parties continued to initiate contempt, recall and transfer proceedings alleging fraud and non-compliance with the resolution plan.
The controversy intensified when NCLT Ahmedabad benches recused themselves from hearing matters connected with Essar Steel and ArcelorMittal Nippon Steel India, following allegations against the Tribunal and its members. The NCLT President administratively transferred the matters from Ahmedabad to the Mumbai Bench.
A single judge bench of the Gujarat High Court quashed the recusal and transfer orders, holding that the NCLT benches ought not to have recused themselves due to the conduct of litigants or counsel and that courts should not encourage forum shopping or bench hunting. The Court also set aside the transfer of matters from Ahmedabad to Mumbai.
When the Union of India challenged the ruling, a Division Bench declined to examine the merits, noting that the Supreme Court was already considering the issues. The Division Bench disposed of the appeal and left all questions open for consideration by the Supreme Court.
The Supreme Court had meanwhile observed in connected proceedings that transfer requests based on judicial observations amounted to a 'brazen attempt to browbeat' tribunal members and could not justify transfer of cases.