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Informist, Monday, May 26, 2025

 

 

--SC orders status quo on NCLT proceedings to liquidate Bhushan Power 

--CONTEXT: JSW Steel moves SC to stay proceedings to liquidate Bhushan Power

 

 

NEW DELHI – The Supreme Court on Monday ordered status quo on the proceedings in the National Company Law Tribunal to liquidate Bhushan Power & Steel Ltd. This status quo shall operate till the apex court decides on the review petition filed by JSW Steel Ltd., whose resolution plan for Bhushan Power was rejected by the top court. 

 

JSW Steel moved the Supreme Court Friday to stay proceedings to liquidate Bhushan Power & Steel till the petitioner company exhausts all its legal remedies. An application to liquidate the debt-ridden Bhushan Power was pending with the Delhi bench of the National Company Law Tribunal.

 

The top court noted that JSW Steel's limitation period for filing a review against the Supreme Court's judgment is not yet over. The liquidation of the company might jeopardise the review petition to be filed by JSW Steel, said the bench of Justices B.V. Nagarathna and Justice Satish Chandra Sharma. 

 

Advocate Neeraj Kishan Kaul, appearing for JSW Steel, said that the company still has time till Jun. 2 to file the review petition. It was a complex matter which will take some time, said Kaul. Solicitor General of India Tushar Mehta, appearing for the committee of creditors, suggested "a way out", that the matter be in the tribunal be deferred. 

 

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 company. On May 2, the Supreme Court had set aside JSW Steel's resolution plan for Bhushan Power on a petition by operational creditor Kalyani Transco. Ruling JSW Steel's resolution plan illegal and saying it should not have been accepted by the committee of creditors of the debt-ridden company, the top court had directed the liquidation of Bhushan Power.

 

JSW Steel has urged the court to keep in abeyance the proceedings initiated before the tribunal by the erstwhile promoters of Bhushan Power to appoint a liquidator for the company. The petitioner said that in 2021, it had implemented the resolution plan and necessary payments of INR 193.50 billion to financial creditors and INR 3.50 billion to operational creditors were made as per the timelines.

 

The petitioner company said it was working on its legal recourse of review under Article 137 of the Constitution. JSW Steel said the Supreme Court's judgment directing refund of the amounts it had paid was "yet to be worked out". Among all this, the erstwhile promoters of Bhushan Power had, in an unnecessary haste and without any standing, filed an application before the tribunal to appoint a liquidator, it said.

 

Any precipitative step by the tribunal to appoint a liquidator would be prejudicial in a matter that needs careful consideration of a variety of legal and factual issues, JSW Steel said. In any event, no step that could be prejudicial to the petitioner or other stakeholders like the erstwhile creditors of Bhushan Power ought to be taken by the tribunal in view of the fact that JSW Steel is well within the statutory timelines to avail statutory and constitutional remedies available to it, including the right to seek a review of the Supreme Court's verdict, it said.

 

At 1354 IST, the shares of JSW Steel Ltd. were up 2.1% at INR 1,029.40 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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