JSW to move review petition against Bhushan Steel judgment before July 14

Sajjan Jindal-promoted JSW Steel is set to file a petition seeking review of the Supreme Court judgment scrapping its acquisition of debt-laden Bhushan Power and Steel (BPSL) before the court reopens after summer recess on July 14. The firm is currently drafting the petition, people in the know said.

 

On Monday, BPSL lenders, including  State Bank of India (SBI) and Punjab National Bank (PNB), filed review petitions against the same judgment.

 

A review petition, filed to review a court’s order, must be filed within 30 days of the judgment or order. However, vacation days of the court are not included in this window. On May 2, the Supreme Court rejected the ₹19,700 crore Resolution Plan submitted by JSW Steel for BPSL, holding the plan “illegal” and ordered the latter’s liquidation, four years after the company was acquired under the Insolvency and Bankruptcy Code (IBC).

 

But, a few days later, on May 26, the court ordered status quo on the matter. A bench of Justice BV Nagarathna and Justice Satish Sharma said limitation period for filing a review against its judgment is not yet over.

 

A “status quo order” is a legal directive issued by a court to maintain the existing condition of a matter until a final decision or resolution is reached. The bench observed that the liquidation of the company might jeopardise the review petition to be filed by the JSW and ordered status quo in the interest of justice.

 

Senior Advocate Neeraj Kishan Kaul, appearing for JSW, had said that even before the time for filing a review against the Supreme Court’s judgment (which quashed JSW’s resolution plan for Bhushan Steel) is over, the NCLT was proceeding to appoint a liquidator. 

 

JSW, Kaul informed the apex court, had time till June 2 to file the review.

 

“If a liquidator is appointed, we will be in great difficulty. It is a profit-making company and this resolution plan was given four years ago,” he had then said. 

 

The bench, however, pointed out that the NCLT proceedings are in pursuance of the Supreme Court’s directions.

 

Solicitor General Tushar Mehta, appearing for the lenders, suggested that the matter be deferred till June 10.

 

The bench said that it was granting the relief only in the interest of justice and to avoid future complications of the matter. JSW undertook that the review petition would be filed within the limitation period.

 

 After the Supreme Court judgement, the former promoter of BPSL Sanjay Singal approached NCLT, Delhi, urging it to enforce the liquidation order. It was, however, later paused by the apex court.

 

Lenders oppose liquidation

 

Lenders of BPSL had on May 13 indicated before the NCLT Delhi that they may prefer a fresh insolvency process for the company rather than sending it for liquidation.

 

“Every option is under consideration because this will have to be clarified by the honourable court... We may even persuade the court to initiate a fresh CIRP (Corporate Insolvency Resolution Process) because the ultimate objective of the IBC (Insolvency and Bankruptcy Code) is to preserve the company as a going concern. Liquidation is the ultimate death,” Solicitor General Tushar Mehta, appearing for the lenders and other stakeholders, told the NCLT.

 

On the other hand, Singhal’s lawyer had urged the tribunal to appoint someone to take control of the company’s assets to prevent potential “siphoning” of assets.

 

The apex court had ruled that prior resolution efforts were invalid due to JSW Steel’s ineligibility under Section 29A of the IBC.

 

Section 29A bars certain individuals or entities from submitting resolution plans during an insolvency process. The move revives years long insolvency litigation over the steelmaker, once pursued by JSW Steel in a stalled acquisition effort.