NCLAT dismisses Tata Steel plea; upholds lender's decision to approve JSW's bid for Bhushan Power & Steel

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Monday dismissed a Tata Steel’s plea and upheld lenders’ decision to approve resolution plan of JSW Steel for debt-ridden Bhushan Power & Steel Ltd.

A two-member bench headed by Justice S J Mukhopadhaya said that the Committee of Creditors’ (CoC) decision was well within its rights to negotiate better terms with resolution applicants.

Tata Steel had challenged an NCLT order that had allowed the CoC of Bhushan Power and Steel to the resolution plan submitted by Liberty House Group. Tata Steel had contended that NCLT cannot provide numerous opportunities at the belated stage.

Dismissing Tata Steel’s appeal, the NCLAT also directed the resolution professional of Bhushan Power and Steel to “immediately place the approved Resolution Plan before the Adjudicating Authority (NCLT) for its order.”

“The case is remitted to the Adjudicating Authority (NCLT), Principal Bench, New Delhi, for passing appropriate order under Section 31,” the NCLAT said.

The tribunal also observed that 97.12 percent of lenders had cast vote in favour of JSW Steel and it holds that the Resolution Plan’ submitted by JSW Steel has been approved with 100 percent voting shares.

Tata Steel, JSW Steel, and Liberty House had submitted bids for Bhushan Power and Steel, which owes around Rs 45,000 crore to its lenders.

The NCLAT also directed the NCLT to ensure that all the stakeholders, particularly the Operational Creditors’ are treated similarly while considering the approved Resolution Plan’ of JSW Steel.

“It should ensure that no discrimination is being made between the Financial Creditors or the Operational Creditors as held by this Appellate Tribunal,” said NCLAT.

JSW Steel had revised its offer from Rs 11,000 crore to Rs 18,000 crore and later to over Rs 19,000 crore, whereas Tata Steel’s last offer was at Rs 17,000 crore after it had refused to revised its bid.

Tata Steel had objected to the improved financial offer of JSW Steel before the Resolution Professional and the Committee of Creditors’ of Bhushan Power and Steel.

It alleged that in its meeting held on 14 August 2018, CoC was “favouring JSW Steel”.

According to Tata Steel, the CoC had submitted as many as six ‘Resolution Plans’, which were wrongly considered by them.

However, rejecting it, NCLAT said that it had allowed Tata Steel to file additional unconditional revised financial offer by 13 August 2018, improving the bid as provided in the original plan without compromising the basic parameters of the offer already submitted.

“We have noticed that Tata Steel was adamant that it will not submit any revised financial offer. Initially, such submission was orally made by learned counsel, however, on their subsequent oral request, we allowed the Tata Steel to submit revised financial offer,” the NCLAT observed.

It further said: “We have noticed that Tata Steel also filed five revised financial offers including the offer given in the original resolution plan.

“Therefore, Tata Steel cannot take plea that after submission of the original ‘Resolution Plan’, no revised financial offer’ can be submitted,” it said.