Ex-promoter of Bhushan Power moves NCLT to enforce SC's liquidation order

Business Standard

09-05-2025

Sanjay Singhal, the former promoter of Bhushan Power & Steel Ltd, has filed a petition with the National Company Law Tribunal in New Delhi to seek enforcement of the Supreme Court's recent order directing the bankrupt company's liquidation.
Singhal, in a petition dated May 6, asked the NCLT to take on record the court order and give directions to appoint a liquidator. 'Business Standard' has reviewed the petition.
The court on May 2 rejected JSW Steel's resolution plan to acquire Bhushan Power four years after the takeover was completed, and ordered the liquidation of the debt-ridden firm. The order revived a years-long insolvency litigation and is a setback for lenders.
Bhushan Power owes lenders more than Rs 47,200 crore and it was among the 12 companies first sent for debt resolution by the Reserve Bank of India in 2017 under the Insolvency and Bankruptcy Code, 2016 (IBC).
The court's order sets the stage for a long legal battle in which lenders and JSW Steel are expected to fight for their interest.
The Supreme Court said JSW Steel had not disclosed that it had a joint venture with an entity linked to Bhushan Power's former promoters. Resolution professional Mahender Kumar Khandelwal did not flag this fact and failed in his statutory duties under Section 25 of the IBC, including verifying the eligibility of the resolution applicant under Section 29A. Section 29A disqualifies former promoters and their related parties of the corporate debtor, as well as certain other individuals, from participating in the revival of a distressed company.
'It is pertinent to note that in the 14th Meeting of the committee of creditors (CoC), it was specifically brought to the notice of the CoC by the legal counsel of the resolution professional that the resolution plan of the JSW was subject to the compliance of Section 29A. However, in the later meetings there was no clarity made as to whether the JSW had subsequently complied with the said requirement or not. Even if it is believed that JSW had filed an affidavit with regard to its eligibility to submit the Resolution Plan, there is nothing on record to show as to whether such affidavit was verified by the resolution professional as he was obliged to do so,' said the court.