During its hearing on the Bhushan Power and Steel case on May 21, the National Company Law Tribunal (NCLT) instructed all parties involved to show up on Monday, May 26, with a clear plan outlining how they intend to carry out the Supreme Court's ruling to revoke JSW Steel's purchase of the indebted business.

During the May 21 hearing, the NCLT issued the direction, emphasizing the need for prompt and complete adherence to the Supreme Court's decision.

Citing procedural errors and statutory duty violations by the Committee of Creditors (CoC) and resolution specialists during the insolvency processes, the supreme court had already invalidated the approved resolution plan that permitted JSW Steel to acquire Bhushan Power.

On May 26, the NCLT directed the advocates who represented the different parties to produce a strategy outlining how the Supreme Court's order would be implemented. The NCLT further stated that the Supreme Court's ruling must be followed in both letter and spirit.

The litigation, which has been going on for more than four years, has reached a crucial point because JSW Steel had already acquired Bhushan Power and invested a sizable sum of money in the business. However, the Supreme Court decided that Bhushan Power and Steel Ltd. must regain its ownership and assets as they were before to the approval of the faulty resolution plan. The Tribunal further stated that it is essential that the Supreme Court's direction be carried out within stringent timeframes, citing the ruling rendered in the Jet Airways case.

The appointment of a liquidator to supervise the process of reversing the resolution plan is one of the Tribunal's primary legal obligations.

 

Since JSW Steel is against the appointment and claims that all assets have already been moved and incorporated into its operations, this is a contentious issue.

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There are substantial financial complications. It may now be necessary for CoC members who received compensation under the abandoned resolution proposal to reimburse the money. Lenders will also have to reestablish their security charges, which are court claims on the borrower's assets that were canceled when JSW took over, after the loan is paid back.