NCLT rejects promoters' challenge to Union government's ₹5,431 crore recovery plea against Bhushan Power, affirming liability despite insolvency resolution.
NCLT Upholds Govt's Recovery Plea Against Bhushan Promoters
The National Company Law Tribunal (NCLT) has dismissed a challenge by former promoters of Bhushan Power and Steel Limited (BPSL) to the maintainability of a petition filed by the Union of India seeking recovery of ₹5,431 crore allegedly diverted from the company. The case is Union of India v Bhushan Power and Steel Limited.
A bench of President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi held that the completion of insolvency resolution under the Insolvency and Bankruptcy Code, 2016, and the appointment of a new management do not bar the government from pursuing claims against individuals responsible for fund diversion.
The order clarifies that personal liability for corporate fraud survives resolution processes. This decision strengthens enforcement mechanisms for asset recovery and may encourage regulatory agencies to pursue parallel proceedings against erring promoters even after corporate restructuring.
Citations
- Union of India v Bhushan Power and Steel Limited
