Banks set to seek SC's intervention to help close Bhushan Power case

JSW Steel on its part had sought time till the end of the current financial year from the banks to implement the resolution plan, people in the know told CNBC-TV18. In its letter to the creditors' committee, JSW Steel cited COVID-19 related challenges causing a delay. The Sajjan Jindal-led company also remains hesitant to close the transactions before the ED case is closed and the company’s assets are released from attachment, said one of the people quoted above.

However, banks have rejected this request, said a senior official in the know. In a letter sent to the company on June 20, banks said, “If the resolution plan is not implemented within 2 weeks of this letter, we shall take steps, including but not limited to actions under Section 74 of the IBC and invocation of bank guarantee against JSW Steel Limited for willful non-compliance with the terms of the Resolution Plan, and for recovery of all losses, including interest for the delayed period.” Section 74 of IBC deals with punishment for contravention of a resolution plan.

JSW Steel had moved NCLAT to get immunity from the Enforcement Directorate (ED) on various charges levied against Bhushan Power’s former promoters, which the court granted. ED has attached assets of over Rs 4,000 crore in the Bhushan Power case so far. The former promoter of BPSL Sanjay Singhal also moved the Supreme Court against the NCLAT order. While the Supreme Court has not stayed the implementation of the resolution plan, it admitted Singhal’s plea. The matter was last heard on June 10, when the court directed all parties, including ED, to file additional documents within two weeks.

In a response to CNBC-TV18’s query relating to this story, a JSW Steel official said, “The matter is subjudice before the Honourable Supreme Court as all the parties in the last hearing were asked to file their submissions to SC within two weeks in response to the application filed by JSW Steel. Pending adjudication of Appeals and CoC Application before SC the plan is incapable of implementation more so when the assets of BPSL are continued to be attached by ED.”