NCLAT allows lenders to meet and finalise Bhushan Power bid

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Friday gave a go-ahead to the lenders' meeting of debt-ridden Bhushan Power & Steel (BPSL), directing it to finalise a bid for the company.

Vacating its earlier stay, the appellate tribunal has directed the committee of creditors (CoC) of the company to consider the resolution plans submitted by three firms -- Tata Steel, Liberty House and JSW Steel. NCLAT has also directed the CoC to call all the three bidders, along with operational creditors and suspended board of directors, in the meeting.

“The CoC would call for urgent meeting to take the resolution plan for discussion and approval,” said a two-member bench headed by Chairman Justice S J Mukhopadhaya.

He further said, "Resolution professional (RP), after consulting CoC, will invite operational creditors and all three resolution applicants will remain present on the date of consideration of the resolution plan.”

The suspended board of director are also allowed to attend the meetings in which resolution plan will be considered by CoC, NCLAT said in its orders. Earlier, on July 17, NCLAT had stayed the meeting of CoC when they were going to vote for finalisation of the highest bidder (H1) for BPSL.

“The best of the three plans, which are in consonance with section 30(2) and are viable, feasible and acceptable to majority of CoC be voted on the same or subsequent date to approve,” said NCLAT.

It further said, "The CoC may also indicate the second best plan (H2) so that in future the adjudicating authority can approve in case of any problems with the first resolution plan.”

The appellate tribunal further said that CoC will place selected resolution plan before adjudicating authority, which may approve it, but they will not give effect without prior approval of this tribunal (NCLAT).

On Friday, during the proceedings of the appellate tribunal, RP tendered an unconditional apology. However, NCLAT said it would hear it whenever the date comes.

The appellate tribunal has directed to list the matter on August 1 for next hearing. During the last hearing on July 17, NCLAT had pulled up the RP of the company, Mahendra Kumar Khandelwal, for not following its previous orders to allow the representatives of operational creditors to attend the meeting.

It had said that it would consider whether contempt of court proceedings should be initiated against the RP in the next hearing, which was on Friday.

In the last hearing, operational creditors of the company had alleged that their representatives were not allowed to attend the CoC meeting. Moreover, Liberty House, a resolution applicant has alleged that information was not supplied about the meeting and on July 11 RP gave a 19-page checklist seeking the company's compliance on 29 A of Insovency and Bankruptcy Code (IBC).

Earlier, the company's lenders had rejected the resolution plan submitted by Liberty House citing delay, following which the UK-based group had moved the National Company Law Tribunal (NCLT).

The NCLT had on April 23 directed BPSL's lenders, led by PNB, to consider the bid submitted by Liberty House. This order was later challenged by Tata Steel, another resolution applicant of BPSL, before NCLAT -- the appellate tribunal.