NCLAT rejects CoC plea seeking early disposal of Bhushan Power and Steel CIRP

Source:- barandbench.com

The National Company Law Appellate Tribunal (NCLAT) has rejected an “appeal” made by the Committee of Creditors (CoC) of debt-ridden Bhushan Power and Steel seeking the “early disposal” of the corporate insolvency resolution process by the Adjudicating Authority, National Company Law Tribunal (NCLT), New Delhi.

The plea was filed to speed track the process in the matter after the NCLT had reserved its judgement on the approval to JSW Steel’s resolution plan for Bhushan Power and Steel on April 23.

Rejecting the CoC’s “appeal”, a three-member Bench of the NCLAT headed by Chairperson, Justice SJ Mukhopadhyay stated that in absence of any order passed by the NCLT, it was “not inclined to entertain this Appeal”.

It was the CoC’s case that the matter had been pending for a very long time, delaying the conclusion of the CIRP when 270 days period has already lapsed. Thus, a direction should be given for early disposal of the matter.

The NCLAT was informed that the issue of consideration of JSW’s resolution plan was remitted to NCLT on February 4, 2019.

The CoC further informed that in the meantime a plea was also preferred by the Directors of Bhushan Power and Steel Limited before the Punjab & Haryana High Court, raising objections with respect to the procedure adopted by the CoC to approve JSW’s plan.

The High Court then passed certain directions on April 18, asking the NCLT to follow the procedure laid down by the Supreme Court and held that any order passed by the NCLT, which is in contravention, contradiction or derogation of the directions of the Supreme Court should not be taken into consideration.

The CoC’s plea was opposed by the erstwhile Directors and promoters of Bhushan Power and Steel. However, their intervention was rejected by the NCLAT.

While the Appellate Tribunal refused to entertain the “appeal” by CoC, it observed that it was “not clear” as to how a vacation Bench of the Punjab & Haryana High Court passed an ex-parte order in the matter and even disposed it of without issuing notice to the banks.

“The Hon’ble High Court has jurisdiction under Article 226 of the Constitution of India and has also supervisory jurisdiction under Article 227 of the Constitution of India. We are not expressing any opinion as to whether they have the supervisory jurisdiction over all the Tribunals or not, but it is not clear as to how the Punjab and Haryana High Court can pass an order, which has no territorial jurisdiction over Delhi, where Principal Bench of National Company Law Tribunal, New Delhi is situated, who is considering the matter.”

Adding that it does “not want to express any opinion with regard to the order” passed by the High Court, the NCLAT clarified that the NCLT was supposed to decide the case on merit in accordance with law, uninfluenced by any order except its decision and that of the Supreme Court.

The CoC was represented by Solicitor General and Senior Advocate Tushar Mehta with Advocates Bishwajit Dubey, Spandan Biswal, Srideepa Bhattacharya, Sylona Mohapatra and Surabhi Khattar.

The erstwhile Directors and promoters were represented by Senior Advocate Mukul Rohatgi with Advocates Arvind Kr Gupta and Henna George.