NCLAT stays voting by Bhushan Power & Steel lenders on finalising bids

The NCLAT today stayed the meeting of Committee of Creditors (CoC) of Bhushan Power and Steel Ltd to vote on finalisation of bids of the debt-ridden firm.

The National Company Law Appellate Tribunal (NCLAT) also pulled up the Resolution Professional (RP) of the company, Mahendra Kumar Khandelwal, for not following its previous orders to allow the representatives of operational creditors to attend the meeting.

The appellate tribunal also said that it would consider whether contempt of court proceedings should be initiated against the RP in the next hearing.

A two-member bench headed by Chairman Justice S J Mukhopadhaya directed him to be present in the next hearing.

The CoC should not proceed with the meeting at present. If the meeting is fixed today, let it be adjourned for two days. Let the matter be listed on Friday, NCLAT said.

It said all the parties including operational creditors should have been informed about the meeting, and stayed it for not following the rules.

RP would be personally present in the next hearing on July 20 and we will see if proceedings of contempt of court should be initiated against him or not, the bench said.

The NCLAT also asked Liberty House, a resolution applicant, to submit clarification sought by the RP over its eligibility criteria under the Insolvency & Bankruptcy Code (IBC).

Liberty House may give clarification to RP and CoC over clarification sought on compliance of 29 A of IBC, the bench said.

During the proceedings, senior advocate A S Chandioke, appearing for Liberty House, submitted that on July 11 RP gave a 19 page checklist seeking the company's compliance on 29 A of IBC.

It is not clear as to what clarification is to be given under 29 A if the resolution applicant has given all information. He is not supposed give any further information. If any clarification is required to be taken then it has to be taken at CoC meeting in which the applicant would be called, the bench observed.

Senior advocate Sanjeev Sen, appearing for operational creditors, submitted that their representative was not allowed to attend the meeting.

We were not sent the notice for the meeting. Our representative is not allowed and our suggestions are not taken, he said, adding that there are 1,700 operational creditors and all would be wiped out if their money is not recovered.

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.

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.