L&T terms Bhushan’s resolution plan as discriminatory against operational creditors

Larsen & Toubro Ltd (L&T), which is an operational creditor to Bhushan Steel Ltd, on Monday termed the resolution plan of debt-ridden firm as "discriminatory" and "arbitrary" saying its Rs 900 crore outstanding has not been given due priority by the Committee of Creditors (CoC).L&T, through its counsel claimed it to be an "operational secured creditor" of Bhushan Steel as it has also contributed into the company by providing plants and machinery, like the other secured creditors of the debt-ridden firm and sought a higher preference in repayment of dues before NCLT.Meanwhile, another firm Bhushan Energy Ltd (BEL) on Monday moved the National Company Law Tribunal (NCLT) over termination of its power purchase agreement (PPA) with Bhushan Steel Ltd.

According to senior advocate Mukul Rohatgi, appearing for the engineering and construction firm L&T, only Rs 1,200 crore has been allotted for the operational creditors under the resolution plan. "Rs 200 crore is for pro rata distribution to all operational creditors and balance Rs 1,000 crore would depend on their discretion," Rohatgi said, adding "according to me, this type of treatment is discriminatory and arbitrary".

He further said: "Our case is different... We have contributed to their plant with goods and machinery which are embedded in the earth and are immovable property... We are a secured creditor." Rohatgi contended that L&T can not be treated like other operational creditors of Bhushan Steel and it should be given "priority" over them.