In a interesting twist, the Supreme Court had accepted the petition filed by Bhushan Power and Steel promoter Sanjay Singal against JSW Steel’s bid to take over the bankrupt company in an insolvency driven process.

Among other issues, the petitioner had questioned the National Company Law Appellate Tribunal’s powers to provide immunity for JSW Steel from the ongoing investigation against BPSL and its promoters.

The three-judge Supreme Court panel headed by Chief Justice SA Bobde refused to stay JSW Steel from proceeding with the acquisition.

The court said if JSW Steel pays the money and loses the case, then the lenders have to return the money to the company.

The development has put JSW Steel in quandary as it will be declared a defaulter if it does not pay the committed ₹19,700 crore to close the deal before the March 16 deadline.

JSW Steel’s plea in the Apex Court not to declare it as defaulter remains inconclusive.

The next hearing in the case is fixed for April 15.

Singal had questioned the NCLAT’s decision to approve JSW Steel’s bid despite the Enforcement Directorate attaching BPSL’s asset under the Prevention of Money Laundering Act.

The petition also asked whether Section 32A inserted through an ordinance conferred powers on the NCLAT to remove the attachment made by the Enforcement Directorate under the PMLA. This apart, the NCLAT has allowed the winning bidder JSW Steel to retain the EBITDA of ₹3,000 crore made during the insolvency period.

Rightfully, the petition claimed that the money should go to the financial creditors.

It is submitted that during the insolvency period, the company was run by the committee of creditors at its own cost and risk without servicing the huge outstanding debt.

The Committee of Creditors in its affidavit filed last October made a claim on the EBITDA, but it has been quashed by the NCLAT.

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