Supreme Court orders status quo on liquidation of Bhushan Power and Steel

Appearing for JSW Steel, Senior Advocate N K Kaul said that it had time till June 2 to file the review but even before it was over, the NCLT was going ahead with the appointment of a liquidator. He contended that the company “will be in great difficulty” if that happens.

Justice Nagarathna pointed out that the NCLT proceedings were in pursuance of the Supreme Court’s directions.

Solicitor General of India Tushar Mehta, who appeared for the Committee of Creditors (CoC), said NCLT will have to hear the matter and the court could ask it to do so on June 10.

Given that the court is on partial working days (summer vacation), Justice Nagarathna pointed out that review petitions are not usually listed during such period. Mehta said that some way will have to be found.

Justice Nagarathna said JSW Steel has a right to file review and added, “We don’t know what will be the fate of” it and it would therefore be appropriate that both sides maintain status quo in the meanwhile.

Appearing for JSW ex-promoter Sanjay Singhal, Senior Advocate Dhruv Mehta opposed JSW’s plea.

Referring to Singhal, the Solicitor General, however, said, “The less they speak, it is better for them. They are already under a chargesheet. Having left the company years ago, they are now pressuring the NCLT. You are the creator of the problem.”

The bench recorded Kaul’s submission that the review petition will be filed before the expiry of the limitation period and said in its order, “without observing anything on the merits, we find that the interests of justice would be subserved, and in order to avoid future complications in the matter, if there is a status quo of the proceedings pending before the NCLT.”

A bench of Justice Bela M Trivedi, since retired, and Justice Satish Chandra Sharma had on May 2 rejected JSW Steel’s bid to acquire BPSL and ordered the liquidation of the company. The court quashed and set aside the September 5, 2019, NCLT order and February 17, 2020, National Company Law Appellate Tribunal (NCLAT) order upholding JSW’s resolution plan. Exercising suo motu powers under Article 142, the court also directed NCLT to initiate liquidation proceedings against BPSL.

BPSL was among the 12 big accounts – infamously known as the “dirty dozen” constituting about 25 per cent of the total non-performing assets in the country – identified by the Reserve Bank of India for resolution under the Insolvency and Bankruptcy Code (IBC) by a circular dated June 13, 2017.

JSW acquired BPSL in March 2021 under the code. JSW group chairman and managing director Sajjan Jindal had then said that the acquisition had helped the group make an entry into Odisha and east India.