NCLAT asks investigative agencies to clarify over JSW Steel's immunity in BPSL matter

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has asked the investigative agencies like Enforcement Directorate, SFIO and the CBI to file an affidavit clarifying whether JSW Steel, a successful bidder for Bhushan Power and Steel Ltd (BPSL), is liable for offences committed by the previous management of the debt-laden firm under the amended IBC.

A three-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya asked the agencies to file their reply affidavits by January 20 stating whether after insertion of section 32 A in the Insolvency and Bankruptcy Code (IBC) last month, JSW Steel has immunity from the alleged fraud committed by the previous BPSL managemet.

"The Directorate of Enforcement and the central government through the Secretary, MCA on behalf of the Serious Fraud Investigation Office (SFIO) and the Central Bureau of Investigation (CBI) are allowed to file additional reply affidavit by 20th January, 2020 stating therein as to whether JSW Steel, whose plan has been approved, are covered by newly inserted Section 32A of the IBC, 2016," said the NCLAT in an order passed on January 13.

It further said: "In case, the answer is in negative, they will enclose the evidence in support of their stand after serving a copy of the same on the learned counsel for JSW Steel and other appellants."

The appellate tribunal had directed to list the petition on January 23, for next hearing.

The government had last month amended the Insolvency and Bankruptcy Code (IBC) and inserted section 32A inside it, which mandates that once management or control of a debt-ridden company changes after the completion of Corporate Insolvency Resolution Process, it would not be liable for any offences committed prior to the commencement of the insolvency resolution process.