New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Thursday rejected an appeal of UK-based Liberty House to temporarily halt the bankruptcy resolution process of Bhushan Power and Steel Ltd.
The two-judge NCLAT bench, headed by justice S.J. Mukhopadhyay, directed the committee of creditors (CoC) to proceed with the resolution process. “The CoC has the option to pass appropriate orders with respect to resolution applicants and place the same before the adjudicating authority. The adjudicating authority is also free to pass any orders. To this effect, the interim order passed on 9 May stands modified,” the bench said.
The appellate tribunal was hearing an appeal moved by Tata Steel Ltd challenging a National Company Law Tribunal (NCLT) order directing the CoC to consider UK-based Liberty House’s resolution plan. Tata Steel is in the race to acquire Bhushan Power and Steel.
In its last hearing, NCLAT reiterated its 9 May order allowing the CoC to consider the resolution plans submitted before it and to place the decision with respect to the successful bidder in a sealed cover. This decision is subject to the final outcome of the appeal.
Liberty House had moved NCLT on 26 February against the rejection of its “unopened” bid for Bhushan Power and Steel by the CoC for late submission, and its failure to submit certain documents, such as a confidentiality undertaking.
The last date for submission of bids was 8 February, whereas the insolvency resolution professional received Liberty House’s proposal on 20 February.
Bhushan Power and Steel, which owes over ₹48,500 crore to a consortium of lenders led by Punjab National Bank, is one of the 12 large companies identified by the Reserve Bank of India for early insolvency resolution. The resolution period for the company was supposed to end on 23 June. However, the appellate tribunal said that the duration of the pending appeal be excluded from the 270-day resolution window, during which a corporate insolvency process has to be completed.