Former promoters of Bhushan Power Today (Aug 7) urged the Supreme Court to restart the insolvency process instead of liquidating the company. They argued that the approved JSW plan should be reviewed if it is found legally flawed.
Thank you for reading this post, don't forget to subscribe!
NEW DELHI: In the Bhushan Power and Steel Ltd (BPSL) insolvency case, the former promoters of the company told the Supreme Court that they do not want the company to go into liquidation, and instead seek a fresh corporate insolvency resolution process (CIRP) if JSW Steel’s resolution plan is found to have any legal issues.
Senior Advocate Dhruv Mehta, representing the promoters, clearly stated before the top court that once a resolution plan is approved by the Adjudicating Authority, the Committee of Creditors (CoC) has no further role in decision-making.
“If the plan is flawed, I don’t want to go to liquidation. I want a fresh process. Even in liquidation, the first priority is to sell the company as a going concern.”
He explained that the Insolvency and Bankruptcy Code (IBC) does not allow the CoC to revisit or alter the plan after the National Company Law Tribunal (NCLT) has given its approval.
“After approval by the NCLT, the plan attains finality. The CoC has no locus thereafter. They cannot seek to terminate the plan or substitute it with a fresh one.”
Mehta strongly opposed the idea of reopening the plan based on new financial gains or company performance, saying that IBC does not permit changing a legally approved plan just because the company later becomes profitable.
“There are two judgments of this court which say that I am entitled to get the resolution plan and I can challenge it.”
He reminded the Court that any person who is unhappy with the approved resolution plan can challenge it under the IBC before the NCLT or the National Company Law Appellate Tribunal (NCLAT).
ALSO READ: Justice Yashwant Varma And Burnt Cash Found at Delhi Bungalow: A Timeline Of Events
The Supreme Court Bench hearing the case is led by Chief Justice of India BR Gavai, and includes Justices Satish Chandra Sharma and Vinod Chandran.
The case will continue on the next day, when Solicitor General Tushar Mehta will present further arguments.
This hearing came after the Supreme Court on July 31 recalled its controversial May 2, 2025 judgment, which had rejected JSW Steel’s Rs 19,700 crore resolution plan and ordered liquidation of BPSL. The Court admitted that it may have misinterpreted the law in that judgment.
A Bench of CJI Gavai and Justice Satish Chandra Sharma noted that the May 2 ruling ignored many established legal rulings and also relied on incorrect or never-argued facts.
That earlier ruling—by Justices Bela M Trivedi and Satish Chandra Sharma—had found that the CoC made a mistake in approving JSW’s resolution plan. It declared the plan illegal and used the Court’s powers under Article 142 of the Constitution to order BPSL’s liquidation.
JSW Steel, selected as the successful resolution applicant in 2019, had offered Rs 19,700 crore to settle BPSL’s debts. The plan had already been approved by both the NCLT and NCLAT, even though the Enforcement Directorate (ED) raised objections due to alleged money laundering by BPSL’s former promoters.
The May 2 decision shocked the entire insolvency and business community in India. The use of Article 142 to overturn a fully approved and already implemented resolution plan caused concern about the finality and reliability of the IBC process.
As a result, multiple review petitions were filed, which led the Court to agree to rehear the matter in full.
On August 1, when the case resumed, Solicitor General Tushar Mehta argued for the CoC and said that the earlier ruling was based on “speculative reasoning” and did not raise any important question of law.
He also clarified that Section 29A of the IBC—which talks about disqualification of resolution applicants—was never even applicable in this case, but the May 2 judgment had focused too much on it.
Mehta emphasized that JSW Steel has been running BPSL successfully since 2021, providing jobs to over 25,000 people, and making it a healthy business.
“We should also look at the larger picture—25,000 people cannot be thrown on the road,”
-remarked CJI Gavai, agreeing with Mehta.
- SG Tushar Mehta was supported by a team from Cyril Amarchand Mangaldas, including Raunak Dhillon (Partner), Uday Khare (Partner), Aishwarya Gupta (Principal Associate), Isha Malik (Principal Associate), and Anchit Jasuja (Associate).
- The resolution professional was represented by Senior Advocate Navin Pahwa, assisted by a team from Shardul Amarchand Mangaldas, including Misha, Vaijayant Paliwal, Charu Bansal, Nikhil Mathur, and Kirti Gupta.
- JSW Steel was represented by Senior Advocates Gopal Jain and Neeraj Kishan Kaul, with support from law firms AZB & Partners and Karanjawala & Co.
- The AZB team included Rajendra Barot (Senior Partner), Vivek Shetty (Partner), Suharsh Sinha (Partner), Sherna Doongaji, and Akilesh Menezes.
- The Karanjawala & Co team included Nandini Gore (Senior Partner), Tahira Karanjawala (Partner), and advocates Swati Bhardwaj, Akarsh Sharma, Shreyas Maheshwari, Manvi Rastogi, Sharanya Ghosh, and Mahek Karanjawala.
Would You Like Assistance In Drafting A Legal Notice Or Complaint?
CLICK HERE
Click Here to Read Our Reports on CJI BR Gavai
Click Here to Read Our Reports on Ex-CJI Chandrachud
FOLLOW US ON YOUTUBE FOR MORE LEGAL UPDATES
