Delhi HC sets aside money-laundering proceedings against Bhushan Power
This story was originally published at 22:41 IST on 6 February 2025
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NEW DELHI – The Delhi High Court has set aside money-laundering proceedings against Bhushan Power & Steel Ltd., which has been taken over by JSW Steel Ltd. through bankruptcy proceedings. However, the money-laundering proceedings against the company's erstwhile promoters and directors would continue for offences committed prior to commencement of the company's corporate insolvency resolution process.
"In view of the mandate under subsection (1) of Section 32A of the Insolvency and Bankruptcy Code, 2016, the petitioner company or Bhushan Power, having undergone a successful resolution process under Section 31 of the IBC, shall not be prosecuted for the offences committed prior to the commencement of the corporate insolvency resolution process," the court said. The order will be subject to the outcome of the challenges to the approval of the resolution plan pending before the Supreme Court, Justice Manmeet Pritam Singh Arora said.
The high court said there is no dispute over the legal position that once a resolution plan has been approved by the National Company Law Tribunal under Section 31 of the Insolvency and Bankruptcy Code and the conditions specified in Section 32A are fulfilled, the corporate debtor will not be prosecuted for an offence committed prior to commencement of the insolvency proceedings. However, Section 32A also states that an erstwhile officer of the corporate debtor who was in any manner responsible for the conduct of its business and was directly or indirectly involved in the commission of an offence prior to the commencement of insolvency proceedings shall continue to be prosecuted and punished for the offence, the court said.
The National Company Law Tribunal had started insolvency proceedings against Bhushan Power on a petition by Punjab National Bank in 2017. In 2019, it approved the resolution plan submitted by JSW Steel for the debt-ridden company. The same year, the Enforcement Directorate registered a case against Bhushan Power and its officers for money-laundering offences on charges of defrauding banks to the tune of INR 472.04 billion.
Shares of JSW Steel Ltd. Thursday ended slightly lower at INR 948.40 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Nishant Maher
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