In a setback for Tata Steel, the Supreme Court on Friday refused to stay the National Company Law Appellate Tribunal (NCLAT) order that allowed the three bidders — Tata Steel, JSW Steel and Liberty House — in the fray for the bankrupt Bhushan Power and Steel to submit revised bids. A bench led by justice RF Nariman directed the NCLAT to “hear and pass final orders as expeditiously as possible” and also asked the lawyers not to seek any adjournment on August 17, the day the appellate tribunal is slated to hear the case. Earlier, the appellate tribunal had granted extension of time for submitting the revised bids till August 13.
Senior counsel P Chidambaram and Abhishek Singhvi, appearing for Tata Steel, argued that its resolution plan had received the highest score by the committee of creditors (CoC) at its meeting on June 11 and that was prior to the NCLAT’s July 20 order that directed the NCLT to consider top two viable bids. The NCLAT’s August 1 order had said that the CoC will consider and evaluate the revised bids and identify the highest bidder, but put it in a sealed cover until the appellate tribunal passes an order on the original petition of Tata Steel, which is whether the late submission of bid by Liberty House initially should be seen as valid or not.
The case of Bhushan Steel and Power has gone through several twists and turns in the last few months. On July 20 NCLAT had directed the CoC to convene its meeting and consider all the three bids and decide the H1 and H2 bidders and submit the proposal to the National Company Law Tribunal for adjudication.
However, it had added that while the NCLT may decide which is the better bid — H1 or H2 — based on the recommendation of the CoC, it will not disclose it till the appellate tribunal decides on the eligibility of Liberty House. When the CoC subsequently met on July 27 as part of this direction, JSW Steel expressed its desire to revise its bid. The CoC allowed it, which was objected by Tata Steel, which moved to the NCLAT challenging this. Meanwhile, at the CoC meeting on July 31, the lenders chose Tata Steel’s bid as the preferred one. However, with the NCLAT’s August 1 order calling for fresh bids, the CoC’s decision got superseded.
The race for the bankrupt company had taken a turn on April 23 when the NCLT had asked its lenders led by Punjab National Bank to consider the late bid submitted by UK-based Liberty House. Liberty House had, on February 26, challenged the rejection of its bid by the RP on the grounds that it had been submitted late. The two bidders who had submitted their bids within the deadline of February 8 were Tata Steel and JSW Steel.
On May 8, Tata Steel had challenged the NCLT’s order on the consideration of Liberty’s bid in the appellate tribunal. Tata Steel had reportedly offered to make an upfront payment of Rs 17,000 crore to the lenders, way better than JSW Steel’s offer of an upfront payment of Rs 11,000 crore. According to sources, Liberty House has offered to pay bankers Rs 18,500 crore upfront, though this could not be confirmed.
Bhushan Power and Steel owed lenders close to Rs 47,000 crore, as on March 31, 2017. Bhushan Power and Steel was among the 12 non-performing assets the Reserve Bank of India had referred for insolvency proceedings in June last year.