Tata Steel, which in 2018 acquired the bankrupt Bhushan Steel, has asked the Supreme Court to overturn a decision made by the Delhi High Court over an avoidance application.
According to two lawyers familiar with the matter, the division bench held that Tata Steel can not benefit from the sums received and that the benefits, which amount to almost Rs 1,000 crore, should be distributed to the creditors.
Tata Steel is appealing the Delhi High Court’s order from January 13 that directed the National Company Law Tribunal (NCLT) to proceed with the avoidance application hearing but also stated that the recovered money could be divided among secured creditors in accordance with the law as determined by the NCLT.
The resolution procedure and the handling of avoidance transactions in insolvency cases, including Srei, which is undergoing in-court reorganisation and has reported fraudulent transactions totalling Rs 13,000 crore, would be significantly impacted by the decision of the Supreme Court in this case.
