The National Company Law Tribunal (NCLT) has adjourned its hearing on a petition filed by Sanjay Singhal, former promoter of Bhushan Power & Steel Ltd (BPSL), to June 26. Singhal approached the tribunal seeking enforcement of the Supreme Court’s recent ruling, which quashed the ₹19,700 crore resolution plan proposed by Sajjan Jindal-led JSW Steel and directed the initiation of liquidation proceedings for BPSL.
The Supreme Court’s May 2 verdict criticized multiple stakeholders, including JSW Steel, for procedural lapses and failure to uphold the objectives of the Insolvency and Bankruptcy Code (IBC). The ruling declared previous NCLT and National Company Law Appellate Tribunal (NCLAT) orders as lacking jurisdiction and set them aside, effectively rejecting JSW Steel’s resolution plan.
During the NCLT proceedings, Solicitor General of India Tushar Mehta emphasized the need to hear all stakeholders involved in the case. He suggested granting time to identify relevant parties and include them in the insolvency tribunal’s deliberations. The tribunal accepted this recommendation, leading to the adjournment.
BPSL has been embroiled in insolvency proceedings since July 2017, when Punjab National Bank initiated action against the debt-ridden company. It was among the first 12 non-performing asset (NPA) cases identified by the Reserve Bank of India. In February 2020, NCLAT had allowed JSW Steel to acquire BPSL, granting it immunity from prosecution by the Enforcement Directorate (ED), which had attached ₹4,025 crore worth of assets linked to alleged bank loan fraud by BPSL’s former promoters.
Following the Supreme Court’s ruling, financial and operational creditors are now required to return funds received under the resolution plan. The verdict also criticized the Committee of Creditors (CoC) for failing to exercise commercial wisdom in approving JSW Steel’s bid, stating that it violated mandatory provisions of the IBC and CIRP regulations.
With liquidation proceedings now set in motion, industry analysts anticipate further legal challenges and potential restructuring efforts for BPSL. The upcoming NCLT hearing in June is expected to provide clarity on the next steps in the insolvency process.
Sources:
[1] NCLT adjourns hearing on Bhushan Power & Steel’s promoter plea for a month https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/nclt-adjourns-hearing-on-bhushan-power-steels-promoter-plea-for-a-month/articleshow/121143679.cms?from=mdr