Supreme Court orders handover of Bhushan Steel assets to JSW Steel

This Supreme Court order resolves a dispute between the Committee of Creditors, the Directorate of Enforcement (ED), and JSW Steel Ltd. regarding the control of properties of Bhushan Power and Steel Ltd. that were provisionally attached by the ED under the Prevention of Money Laundering Act (PMLA) while the company was undergoing insolvency proceedings. It matters to citizens as it clarifies the immediate handover of these assets to the successful resolution applicant, JSW Steel, while preserving the ED's right to investigate the promoters.

Who it concerns: The order concerns the Committee of Creditors (CoC), the Directorate of Enforcement (ED), JSW Steel Ltd. (successful Resolution Applicant), Bhushan Power and Steel Ltd. (Corporate Debtor), and Kalyani Transco.

What the document says

• The Supreme Court directed the ED to immediately hand over control of the properties of Bhushan Power and Steel Ltd., which were provisionally attached on 10.10.2019, to JSW Steel Ltd.
• The handover is to be treated as restitution under Section 8(8) of the PMLA read with Rule 3A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016.
• The Court disposed of Civil Appeals arising out of SLP(C) Nos. 29327-29328/2019 and C.A. No. 3362/2020 based on an affidavit filed by the ED and the consensus of the parties' counsel.
• The Court explicitly stated it did not express any opinion on the merits of the appeals, the interpretation of Section 32A(2) of the IBC, or the ED's powers to attach property of a corporate debtor undergoing insolvency.
• The order was passed without prejudice to the ED's right to investigate cases registered against the accused promoters of Bhushan Power and Steel Ltd. under the PMLA.

Also in the document

• The order was passed on 11.12.2024 by a Bench of Justice Bela M. Trivedi and Justice Satish Chandra Sharma.
• The ED's counsel submitted that Section 32A of the IBC, inserted with effect from 28.12.2019, did not have retrospective effect, which was a factor in the disposal of the appeal.
• The provisional attachment by the ED occurred after the National Company Law Tribunal (NCLT) had approved the Resolution Plan submitted by JSW Steel Ltd.
• Other connected Civil Appeals (including C.A. No. 1808/2020 filed by Kalyani Transco) were listed for hearing on 22.01.2025 and were not disposed of in this specific order.