2 March 2019: The National Company Law Tribunal (NCLT) has dismissed a petition seeking to once again drag Bhushan Steel, which Tata Steel took over last year, to the insolvency court to recover unpaid dues of about Rs 18 crore.
The NCLT principal bench said the petition filed by Vistrat Real Estate, an entity operated by Neeraj Singal, was non-maintainable. Vistrat is a related party of Bhushan Steel and its former promoters Brijbhushan Singal and Neeraj Singal, who were also “time and again authorised to act on behalf of the company” even though they were not on the board of directors, it said.
“It can be safely concluded that the corporate debtor has substantive control in the petitioner’s company,” the bench observed in the order reviewed by ET. “Such transactions are liable to be gone into during the resolution process and deemed to be a preferential transaction.”
The bench said that in any case, the petitioner’s claim of a default is the subject matter of serious dispute.
Bhushan Steel was represented by senior counsel Gopal Jain and VP Singh, partner and head of litigation at AZB & Partners. Bhushan Steel was led to insolvency resolution by State Bank of India in 2017 for owing Rs 44,000 crore to lenders and was acquired by Tata Steel in May last year.
Vistrat claimed the default on Rs 17.97 crore took place in June last year, arising out of a property leased to Bhushan Steel in 2015 for Rs 6 crore every month.
The rental was subsequently found to be higher than the market value by the Bhushan Steel resolution professional, who paid Vistrat Rs 5.6 crore and terminated the agreement after Tata Steel took over the company in May. The premises were vacated in September last year.
This was not disclose petition.