The central government believes there is no need for it to be a party to any review petition being filed in the Supreme Court against the ruling on the JSW’s acquisition of Bhushan Power and Steel, Moneycontrol has learnt from government officials who wished not to be named.
The Centre has reviewed the ruling - which many said may prompt other resolved cases to be re-opened - and is likely to stay in a ‘wait and watch’ mode to observe further developments before intervening, two officials familiar with the development have said.
"The Supreme Court’s ruling has not commented on the Insolvency and Bankruptcy Code (IBC), but rather on the lapses made by stakeholders in the process. There is no need for the government to be a co-petitioner in any review petition," said one of the officials.
On May 7, Moneycontrol had reported that the government feels that there are many ‘errors’ in the JSW-BPSL judgement, and therefore its review is warranted. "The aggrieved parties (JSW and Committee of Creditors) should decide the future course. The government had earlier thought of being a co-petitioner along with JSW, but that may not happen for now," the official further added.
Earlier this month, Financial Services Secretary M Nagaraju had confirmed to Moneycontrol that the government was studying the judgment and exploring all available options. Last week, senior executives of JSW Steel met officials from the Ministry of Corporate Affairs (MCA), the Insolvency and Bankruptcy Board of India (IBBI) and the Department of Financial Services (DFS) to discuss the matter, sources said.
In coming days, the Committee of Creditors (CoC) led by Punjab National Bank is likely to join hands with the JSW Steel in seeking a review of the Supreme Court's verdict in the Bhushan Power and Steel (BPSL) case, Moneycontrol has learnt.
Since the CoC was not part of the litigation earlier, joining JSW Steel's review plea is the only legal remedy available to the lenders. Banks fear that the scrapping of the resolution plan would have a pronounced impact on their financials and those of other lenders represented by the CoC, which makes it even more important that the apex court’s judgment on JSW-BPSL is revisited.
On May 2, the Supreme Court had cancelled JSW Steel’s Rs 19,700 crore acquisition of BPSL and ordered the company's liquidation. JSW had bid for BPSL via the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), which was approved by the National Company Law Tribunal (NCLT) in 2019.
The apex court annulled the resolution plan after five years and raised questions around missed timelines, inconsistent creditor oversight, and the role of promoter-linked structures in resolution plan that was allowed to proceed despite non-compliance on several fronts.
Read More: Decoding the SC order on BPSL liquidation - What sank the JSW deal
"Ideally, JSW is legally vested with all the rights to challenge the ruling and impleadment of government as a petitioner, would not add any weightage to the merits of the case," said Anjali Jain, Partner with Areness Law.
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