Today, On 26th September, Supreme Court upholds JSW’s efforts to turn Bhushan Power & Steel Limited (BPSL) into a profitable enterprise. The Court stated, “We have held that CCDs issued by SRA are to be treated as equity,” protecting investments.
The Supreme Court dismissed appeals contesting JSW Steel’s resolution plan for Bhushan Power and Steel Limited (BPSL), valued at Rs.19,700 crore.
A Bench led by Chief Justice of India (CJI) BR Gavai, along with Justices Satish Chandra Sharma and Vinod Chandran, stated,
“We have held that the delay is not attributable to CoC or SRA. They have been trying to sort it out and enforce the resolution plan. We have held that CCDs issued by SRA are to be treated as equity. Commercial wisdom cannot be interfered with… Once the resolution plan to be approved by CoC, permitting any claims to be reopened will amount to committing violence on provisions of law.”
The Court emphasized that JSW had made significant investments to turn BPSL into a profitable enterprise and should not be penalized for its efforts.
This case stems from the Court’s May 2, 2025, ruling, which invalidated JSW Steel’s plan and mandated BPSL’s liquidation under Article 142 of the Constitution.
Justices Bela M Trivedi and Satish Chandra Sharma had concluded that the Committee of Creditors (CoC) had made an error in approving the plan.
JSW Steel was selected as the successful resolution applicant in 2019, proposing over Rs.19,000 crore to creditors. The National Company Law Tribunal (NCLT) approved the plan in September 2019, which was subsequently upheld by the National Company Law Appellate Tribunal (NCLAT).
However, the Enforcement Directorate (ED) challenged the plan, alleging money laundering by BPSL’s former promoters.
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Earlier, On July 31, the Supreme Court retracted its May 2 decision, acknowledging a potential misapplication of established principles under the Insolvency and Bankruptcy Code (IBC) and reliance on points that were either inaccurate or unargued.
The Court then decided to revisit the case.
During the hearings, the CoC, represented by Solicitor General Tushar Mehta, contended that JSW needed to pay Bhushan Power the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) since it had not completed the takeover as intended.
The former promoter of BPSL argued that the goal was not liquidation, and if flaws were found in JSW’s resolution plan, a new corporate insolvency resolution process (CIRP) should be initiated. They also maintained that the CoC could not extend the implementation period, as it had become functus officio after the NCLT’s approval.
Senior Advocate Neeraj Kishan Kaul, representing JSW Steel, highlighted that the company had taken on a loss-making venture and met its commitments despite delays caused by the ED’s asset attachments. He pointed out that even under the Resolution Professional’s management in 2021, BPSL continued to post net losses.
Conversely, Senior Advocate Dhruv Mehta, representing the former promoters, argued that once a resolution plan is approved, the CoC cannot revisit its terms. He added that bids are based on profits and losses, not EBITDA, and that future profitability should not warrant reopening a finalized plan.
Solicitor General Mehta supported by a team from Cyril Amarchand Mangaldas, including Partners Raunak Dhillon and Uday Khare, along with Principal Associates Aishwarya Gupta, Isha Malik, and Associate Anchit Jasuja.
The Resolution Professional represented by Senior Advocate Navin Pahwa, alongside a team from Shardul Amarchand Mangaldas, which included Advocates Misha, Vaijayant Paliwal, Charu Bansal, Nikhil Mathur, and Kirti Gupta.
Senior Advocate Gopal Jain represented JSW, working with Kaul and supported by teams from AZB & Partners and Karanjawala & Co.
The AZB team featured Senior Partner Rajendra Barot and Partners Vivek Shetty, Suharsh Sinha, along with Advocates Sherna Doongaji and Akilesh Menezes.
The Karanjawala team included Senior Partner Nandini Gore, Partner Tahira Karanjawala, and Advocates Swati Bhardwaj, Akarsh Sharma, Shreyas Maheshwari, Manvi Rastogi, Sharanya Ghosh, and Mahek Karanjawala.
Case Title: Kalyani Transco v. Bhushan Power & Steel Limited
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