NCLAT asks ED, MCA to reach consensus on BPSL assets

The National Company Law Appellate Tribunal (NCLAT) on Friday asked the Enforcement Directorate and the Corporate Affairs Ministry to reach a consensus on the issue of attachment of assets of Bhushan Power and Steel which is presently going through insolvency resolution process.

The Enforcement Directorate (ED) and the Corporate Affairs Ministry (MCA) have locked horns over the attachment of assets of the debt-ridden company by the agency over charges of siphoning of funds by erstwhile Bhushan Power and Steel (BPSL) promoters.

While the ED is of the opinion that it can attach the property of BPSL under the Prevention of Money Laundering Act (PMLA), the MCA has been maintaining that the agency cannot do so as proceedings under the Insolvency & Bankruptcy Code were on.

During the proceedings, a three-member bench headed by Chairperson S J Mukhopadhaya asked both the entities, which are presently under the ambit of same Cabinet minister Nirmala Sitharaman, to settle it, adding that there was no question of amendment of laws.

"It is desirable if the two wings/ Departments of the Central Government sit together and settle the issue," the NCLAT said in its order.

Moreover, the appellate tribunal said that Enforcement Directorate (ED) can claims its dues, which are from the proceeds of crime, under the Insolvency and Bankruptcy Code (IBC) as an operational creditor.

"Prima facie, we are of the view that if the assets are seized by the ED and finally hold that the assets were purchased out of the proceeds of crime', in such case, the amount as may be generated out of the assets will come within the meaning of Operational Debt' payable to the Enforcement Directorate for which it may file claim in terms of the IBC," the bench said.

It further said: "To give an opportunity to the different wings/ Departments of the Central Government, we adjourn the matter."