“The Insolvency and Bankruptcy Code (IBC) is a new law and today’s order would just help to make the IBC more robust,” said Alok Dhir of Dhir & Dhir Associates. “The next step for the RP and CoC is to check the eligibility of both bids and, if they are found suitable, open the financial bids.”

Sources close to the development said that the CoC essentially has three options. The first is that the CoC could open bids and reject them, not on grounds of eligibility, but because they do not meet their financial expectations. “The financial bids of both rounds have not been opened. But the second round of bids are expected to be far more aggressive, so the CoC could reject the first round of bids purely on merit,” said an insolvency lawyer. “The lenders can call for fresh round of bids if they are not happy with the bids,” Dhir agreed.

In the first round, bids were submitted by only Numetal and ArcelorMittal. However, in the second round, JSW joined Numetal in the operating company as an investor. Also, Vedanta joined the fray. After the submission of bids in the first round, VTB, which is the lead investor in Numetal, had indicated that it could increase its offer. So, it is most likely that the bids in the second round would have been more aggressive. Sources say lenders are most likely to seek fresh bids.

The second option for the CoC would be to go for an appeal against the order, which is likely to be time-consuming, sources said.

The third option, they say, would be to open the bids and give Numetal and ArcelorMittal time for rectification. But that could be challenged by other parties, depending on to what extent the rectification can be done.

ArcelorMittal was found to be ineligible on technical grounds because it had sold shares in Uttam Galva Steels but had not been declassified as a promoter from stock exchange records. Since then, however, ArcelorMittal has been declassified as a promoter from the stock exchanges. Whether that would suffice or not remains to be seen. Meanwhile, Uttam Galva Steels has also sought time to repay all its dues. If Uttam Galva Steels ceases to be a non-performing asset, ArcelorMittal’s bid may assume significance.

On Numetal’s part, whether Rewant Ruia will have to be dropped because he is part of the promoter group family and if JSW Steel can be brought in as an investor in the operating company could be key questions. Numetal’s bid was rejected in the first round because Aurora Enterprises had a 25 per cent stake in which Rewant Ruia had an indirect minority interest.

Vedanta, which was a bidder in the second round, could challenge the order to get back in the race, and so could JSW Steel.

Lenders are also afraid of taking decisions, said sources. “Lenders do not want to take any risk and want all IBC transactions to be vetted by the courts due to fear of persecution in future,” said a lender. The final decision on these tricky issues, lawyers said, could well end up at the Supreme Court.