Bhushan Power Case: Delhi HC restrains ED from taking action on attached assets

The Delhi High Court has stalled the Enforcement Directorate (ED) from taking coercive action regarding properties worth Rs 204 crore in the Bhushan Power Case. The properties were attached in the case by the ED which has now been restrained until an appellate tribunal hears the matter. However, the appellate tribunal is currently non-functional. This comes after Advocate Vijay Aggarwal filed a petition and the matter was heard by a single bench judge comprising of Justice Rekha Palli of the Delhi High Court. 

Delhi High Court directs ED to maintain status quo 

The High Court observed that the petition assails the earlier order that was passed on July 12. It further stated that the petitioner had already sought an appeal before the Appellate Tribunal, PMLA along with an application for stay. However, the court stated that since the appellate tribunal is currently non-functional, the petitioner was compelled to approach the Delhi High Court. 

The court further remarked that the ED does not dispute that the fact that the Appellate Tribunal, PMLA is presently not functional. Therefore, it has directed the ED to maintain status quo till the petitioner’s pending appeal and application are taken up for consideration by the Appellate Tribunal. Therefore, the ED has been asked to restrained from acting against the respondent. On the other hand, it has also asked the petitioner to refrain from creating any third-party rights in the subject properties till the appeal is taken up for consideration by the Tribunal. 

Bhushan Power Case 

Bhushan Power & Steel Limited (BPSL) is a steel company engaged in the manufacturing and marketing of steel products. Back in July 2019, the company was allegedly involved in a fraud amounting to Rs 3805.15 crore involving the Punjab National Bank. The ED had attached assets worth Rs 4,025 crore of BPSL in October 2019 with regards to the case. The CBI too had stated that the company had taken loans of Rs 47,000 crore from several banks including the Punjab National Bank, Oriental Bank of Commerce, IDBI Bank, and UCO Bank which later turned into non-profitable assets. More banks came forward and alleged financial misdealing. 

On July 13, 2019, Allahabad Bank disclosed that it had detected a fraud of ₹1,774.82 crore (US$249 million) by BPSL. Later on March 26, 2021, JSW Steel announced that it had paid Rs 19,350 crore to the financial creditors of Bhushan Power & Steel as part of a resolution plan for acquiring the company.