Bhushan Power and Steel: NCLAT issues notice to Centre, ED in JSW Steel’s plea for immunity

The NCLAT has issued notice to the Central Government and the Enforcement Directorate in a plea by the winning resolution applicant for Bhushan Power and Steel, JSW Steel Ltd, seeking immunity for the assets of the former from the ongoing criminal proceedings against it..The NCLAT has recently held that if the assets of a Corporate Debtor are the result of “proceeds of crime”, it would always be open to the Enforcement Directorate to seize the assets in accordance with the Prevention of Money Laundering Act, 2002..Bhushan Power and Steel, as well as several of its office bearers, are facing probe by the Central Bureau of Investigation, Enforcement Directorate as well as the Serious Fraud Investigation Office on account of allegations of money laundering and siphoning of funds etc..Considering the nature of the case, a three-member Bench of Chairperson, Justice SJ Mukhopadhaya, Member (Judicial) Justice AIS Cheema and Member (Technical) Kanthi Narahari today impleaded the Central Government and the Enforcement Directorate as parties to the case..“..we allow the Appellant to implead ‘Union of India’ through the ‘Secretary’, ‘Ministry of Corporate Affairs’, 5th Floor, ‘A’ Wing, Shastri Bhawan, Dr. R.P. Road, New Delhi and ‘Director’, ‘Directorate of Enforcement’, Lok Nayak Bhawan, 6th Floor, Khan Market, New Delhi as Respondent Nos. 3 and 4 respectively. ‘Union of India’ may also address the matter on behalf of the ‘Central Bureau of India’ (CBI) and ‘Serious Fraud Investigation Office’ (SFIO). Necessary corrections be made in the cause-title of the paper-book in the course of the day.”, the order reads..The Appellate Tribunal further said,.“Learned counsel for the Appellant will serve a copy of this order on ‘Secretary’, Ministry of Corporate Affairs and ‘Director’, Directorate of Enforcement personally to enable them to address the court on the question of law….Post the case ‘for orders’ on 14th October 2019 on the top of the list. The appeal may be disposed of on the next date.”.The National Company Law Tribunal, Principal Bench had approved JSW Steel Ltd’s resolution plan for debt-ridden Bhushan Power and Steel Ltd under the Insolvency and Bankruptcy Code, 2016 (IBC) last month..While approving the resolution plan, NCLT had stated that the criminal proceedings initiated against the erstwhile members of the Board of Directors of Bhushan Steel shall not come in the way of the implementation of JSW’s Resolution plan..It had also added that the Members of the CoC could file appropriate applications if criminal proceedings result in the recovery of money which has been siphoned off etc..Senior Advocates Kapil Sibal, Arun Kathpalia appeared for JSW Steel with L&L Partners Advocates Manmeet Singh, Anusha Nagarajan, Bani Brar, Anugrah Robin Frey, Nishtha Chaturvedi, Abhilasha Khanna..Resolution Professional was represented by Senior Advocate Abhinav Vasisht with Shardul Amarchand Mangaldas Advocates Misha, Shantanu, Charu..Senior Advocate Ramji Srinivasan with Cyril Amarchand Mangaldas Advocates Bishwajit Dubey, Spandan Biswal, Srideepa Bhattacharya, Sylona appeared for the Committee of Creditors..Read the Order: