An employee grinds a steel beam at the rolling and universal beam unit of a steel plant in Raigarh, Chhattisgargh, India (Photographer: Udit Kulshrestha/Bloomberg)

NCLAT Stays Bhushan Power Lenders’ Meeting To Vote On Finalising Bids

The NCLAT today stayed the meeting of the Committee of Creditors of Bhushan Power and Steel Ltd. to vote on finalisation of bids for the debt-ridden firm.

The National Company Law Appellate Tribunal also pulled up the resolution professional of the company, Mahendra Kumar Khandelwal, for not following its previous orders to allow the representatives of operational creditors to attend the meeting. The  appellate tribunal also said that it would consider whether contempt of court proceedings should be initiated against the resolution professional in the next hearing.

A two-member bench headed by Chairman Justice SJ Mukhopadhaya directed him to be present in the next hearing.

The CoC should not proceed with the meeting at present, the NCLAT said. “If the meeting is fixed today, let it be adjourned for two days. Let the matter be listed on Friday.” It said all the parties including operational creditors should have been informed about the meeting, and stayed it for not following the rules.

The resolution professional would be personally present in the next hearing on July 20 and we will see if proceedings of contempt of court should be initiated against him or not, the bench said.

The NCLAT also asked Liberty House, a resolution applicant, to submit clarification sought by the resolution professional over its eligibility criteria under the Insolvency and Bankruptcy Code. Clarification was sought from the company on compliance of Section 29A of IBC, the bench said.

During the proceedings, senior advocate AS Chandioke, appearing for Liberty House, submitted that on July 11, Bhushan Power’s resolution professional gave a 19-page checklist seeking the company’s compliance.

It is not clear as to what clarification is to be given under 29A if the resolution applicant has given all information. If any clarification is required to be taken then it has to be taken at CoC meeting in which the applicant would be called, the bench observed.

Senior Advocate Sanjeev Sen, appearing for operational creditors, submitted that their representative was not allowed to attend the meeting. “We were not sent the notice for the meeting. Our representative is not allowed and our suggestions are not taken,” he said, adding that there are 1,700 operational creditors and “all would be wiped out if their money is not recovered”.

Earlier, the company's lenders had rejected the resolution plan submitted by Liberty House citing delay, following which the U.K.-based group had moved the National Company Law Tribunal.

The NCLT had on April 23 directed Bhushan Power’s lenders, led by PNB, to consider the bid submitted by Liberty House. This order was later challenged by Tata Steel, another resolution applicant of Bhushan Power, before the appellate tribunal.