28 May 2019: Lenders to insolvent Bhushan Power and Steel (BPSL) have moved the National Company Law Appellate Tribunal (NCLAT), seeking its direction to the adjudicating authority for expediting order on JSW Steel’s resolution plan. The creditors have cited a notional loss of `11.18 crore a day due to a delay in the verdict by the National Company Law Tribunal (NCLT).
JSW Steel’s Rs 19,700-crore bid for BPSL was approved by the Committee of Creditors (CoC) in October last year.
The NCLT had on April 23 reserved its order on the resolution professional’s application to approve JSW Steel’s bid. More than 660 days have gone past since the corporate insolvency resolution process (CIRP) against BPSL was admitted by the principal bench of the NCLT, much above 270 days mandated under the insolvency law for resolution.
“The CIRP was initiated on July 26, 2017…. However, more than 660 days have passed since the initiation of the CIR process, which is much beyond the expected time period for the conclusion of the resolution process. This has resulted in the CoC incurring loss of public money,” lenders said in the application.
BPSL was among the largest NPAs with a total debt of around Rs 48,000 crore. JSW Steel’s approved bid amounts to Rs 19,700 crore, including `350 crore to operational creditors. The CoC moved the application through advocate Bishwajit Dubey.
“The adjudicating authority has failed to appreciate that timely conclusion of the CIR process of the corporate debtor is of the essence and of paramount interest for the financial health of the country as it will enable the CoC in minimising such financial loss and resultant loss to the exchequer,” the CoC said.
The NCLT carried out hearings on JSW’s resolution plan almost on a daily basis from February 25 and concluded on April 23.
However, towards the fag end of the hearing before the NCLT, one of the suspended directors of the company moved the Punjab and Haryana High Court, alleging that the copy of the resolution plan was not served to him. On this, the high court on April 18 ordered that the suspended director be provided relevant documents and the CoC convene a meeting afresh to consider the suggestions and objections of the director before passing any resolution plan. The order seems to have delayed the NCLT’s plan to pronounce its verdict.