The Delhi High Court has dismissed the money laundering charges against the now-defunct Bhushan Power and Steel Ltd. (BPSL), following its acquisition and operational restructuring under JSW Steel. The decision, delivered by Justice Manmeet P.S. Arora, marks a significant turning point for the company, which faced allegations linked to a substantial bank fraud.
In his ruling on January 30, Justice Arora differentiated between the corporate entity and its former officers, stating that while the charges against BPSL itself would be dropped, the proceedings against its former executives would persist. This distinction upholds the principle that individuals may still be held accountable even if the corporate entity has been absolved of responsibility post-insolvency resolution.
The court’s decision was influenced by BPSL’s successful navigation through the Insolvency and Bankruptcy Code (IBC) process, which led to its acquisition by JSW Steel. This resolution was seen as a fresh start for BPSL, making it unreasonable to continue prosecuting the company for acts committed prior to the insolvency proceedings.
Justice Arora clarified, “In the overall conspectus, the writ petition is being partly allowed with the above clarification and the impugned order dated January 17, 2020, passed by the special judge, CBI, Rouse Avenue district court taking cognisance and issuing process and the consequential criminal proceedings…only to the extent of the petitioner company are being hereby set aside.”
The Enforcement Directorate (ED) had previously implicated BPSL as an accused, along with its erstwhile chairman and managing director, in a money laundering case involving a bank fraud amounting to Rs 47,204 crore. However, senior advocates Abhishek Singhvi and Vikas Pahwa, representing BPSL, successfully argued that the company’s liability for offenses committed before its insolvency resolution ceased following the approval of JSW Steel’s resolution plan.
