SC recalls own order directing liquidation of Bhushan Steel
Insolvency and Bankruptcy Code
process.
Unabashedly admitting that its earlier decision militated against the settled law on inviolability of the decision of Committee of Creditors, a bench of CJI B R Gavai and Justice Satish Chandra Sharma recalled the verdict and posted the matter for fresh hearing next Thursday.
The bench also frowned upon the use of Article 142 by the earlier bench led by Justice Bela M Trivedi, who has since retired, to order liquidation of the revived company despite it being in the pink of health.
"Powers of Article 142 are meant to do complete justice and not cause injustice to 25,000 employees," the apex court said Thursday.
SC's role in IBC proceedings limited, says CJI
In an open court hearing on the review petitions filed by Punjab National Bank, the lead creditor for bankrupt Bhushan Power and Steel Ltd, and JSW, solicitor general Tushar Mehta and senior advocate Neeraj Kishan Kaul told a bench of CJI BR Gavai and Justice Satish Chandra Sharma that IBC proceedings aim to revive sick companies and liquidation is only the last resort.
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The CJI said he has, as an SC judge, authored many judgments crystallising disparate rulings on IBC proceedings to lay down the cardinal principle that concurrent approval by NCLT and NCLAT of a revival plan accepted by the CoC cannot be interfered with by SC unless the petitioner challlenging it establishes a perversity. The verdict in the Bhushan Steel and Power Ltd case appears to be in the teeth of SC rulings.
Mehta said IBC proceedings were followed to the T and it was the decision of the CoC to approve the revival plan of successful resolution professional, which was concurrently upheld by National Company Law Tribunal (NCLT) and the appellate tribunal (NCLAT) leaving little scope for SC interference.
"Liquidating a viable and profit-making entity will be in the interest of none and would create many difficulties for the creditors as well as the successful resolution applicant," he argued.
Kaul said JSW has infused an additional Rs 8,000 crore apart from the Rs 20,000 crore, and the company is now in robust health nearly tripling its productions. It now employs 25,000 people in the revived plant.
On May 26, a bench of Justices B V Nagarathna and Sharma had stayed the liquidation process and ordered status quo after learning that petitions seeking review of the May 2 judgment are pending consideration.
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