NEW DELHI: A National Company Law Appellate Tribunal (NCLAT) bench on Monday stayed the sale of stressed steel maker Bhushan Power and Steel Ltd (BPSL) to JSW Steel.
The bench also asked the Enforcement Directorate (ED) to release the assets of Bhushan Power worth around Rs 4,025 crore, which the agency investigating the money laundering allegations had attached.
JSW Steel had last month moved NCLAT seeking immunity from criminal proceedings in the ongoing bank fraud investigation against erstwhile promoter of BPSL.
The NCLAT bench headed by Chairman Justice S J Mukhopadhyaya said the Insolvency and Bankruptcy Code (IBC) would fail if the agency functions like this.
ED on Saturday attached assets worth Rs 4,025 crore of BPSL in connection with an alleged bank loan fraud, which is being investigated under the Prevention of Money Laundering Act (PMLA), 2002.
“IBC cannot be annulled in this manner. Money laundering is by an individual,” NCLAT said.
During the proceedings, the Ministry of Corporate Affairs (MCA) told the NCLAT that the ED has no jurisdiction to attach assets under the insolvency process. The MCA’s stand is in consultation with the Department of Financial Services and banks.