The Supreme Court Today (Aug 8) heard a high-stakes clash over the Rs 19,000 crore Bhushan Power deal, with serious allegations of financial siphoning and legal delays.
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NEW DELHI: A heated argument took place in the Supreme Court on Friday in the ongoing case related to Bhushan Power and Steel Limited (BPSL).
The court is hearing the case again after its May 2 decision, where it had ordered BPSL’s liquidation and rejected the JSW Steel resolution plan.
The Committee of Creditors (CoC), through Solicitor General Tushar Mehta, strongly opposed the appeal filed by BPSL’s former promoters.
The CoC made it clear that it still has legal authority even after a resolution plan is accepted, especially during the appeal process under Section 62 of the Insolvency and Bankruptcy Code (IBC).
SG Mehta said,
“Once the Committee of Creditors (CoC) is established under Section 21, it continues to exist until the conclusion of the Section 62 appeal. If an authority or body possesses the authority to perform a certain action, it can do so repeatedly.”
Condemning the actions of BPSL’s old promoters, he added,
“This is one of the worst cases of siphoning I have encountered in my career.”
Mehta mentioned that instead of holding the wrongdoers accountable, criticism was being unfairly directed at JSW Steel, the party that offered the best resolution plan.
He also brought up the issue of EBITDA, a financial term, and explained that the matter had already been settled by the National Company Law Tribunal (NCLT).
“The NCLT previously ordered that EBITDA should be distributed to the creditors.”
He then described the situation post-resolution, saying,
“The IRP (Interim Resolution Professional) takes control of the company, and the existing management is removed. The IRP then runs the company, which increases its value from Rs 1,000 crore to Rs 4,000 crore over three years. The question is, who gets the additional Rs 3,000 crore?”
Regarding connections between entities involved, SG Mehta clarified,
“SRA and VPSL are not related by this.”
When the Chief Justice asked about a document, Mehta replied,
“Item 12. Mr Mehta has fairly not touched upon. PAO issued by ED is illegal. This is the provisional attachment order.”
During the hearing, the Chief Justice of India (CJI) made a remark about post-retirement roles:
“After retirement that you are either a HC judge and SC judge. That’s why I have decided to not take any office after retirement.”
SG Mehta replied emotionally,
“What an enriching experience to be a judge of the most powerful court in the world. The Indian SC is the most powerful court in the world.”
Mehta also discussed the impact of how the company’s profits were handled, saying,
“If EBITDA would have gone to the COC their liability would have been proportionately reduced.”
He then turned the spotlight on JSW Steel’s delay in implementing the resolution plan.
“The moment we take a decision regarding the acceptance or rejection of a plan we do not cease to exist. JSW was in breach of the plan for not implementing it within time and JSW will compensate COC day by day.”
He continued,
“We urged JSW to promptly begin executing the plan, as we are accountable to the public. Due to our pressure, they issued a letter in February 2021 agreeing to deposit Rs 19,000 crore within 30 days.”
Talking about decision-making authority, SG said,
“The power to decide still existed with the COC the only difference was that 66% majority was needed. There was deliberate delay by JSW in implementing the RP. It was based on hike in steel prices. JSW has sought to reserve EBITDA of Rs. 6000 crores.”
He also laid out the legal status of CoC:
“In law I continue to exit and so long as I exist I am covered by Sec 14. COC is thus deemed to be in existence till the judgement of court in appeal. The committee shall consider setting up of a monitoring committee.”
Regarding enforcement actions by the Enforcement Directorate (ED) under the PMLA (Prevention of Money Laundering Act), SG Mehta firmly said,
“Once ED has attached a property the NCLAT cannot override the order of attachment by PMLA. There will be two forums then.”
To this, the CJI simply stated,
“We will not touch upon that issue.”
After presenting all arguments, Mehta concluded,
“The learned SG completes his submissions.”
Then it was time for Senior Advocate Mukul Rohatgi (referred to as Mr. Kaul) to present his side. CJI told him,
“Mr. Kaul, you will need to conclude in 30 minutes.”
But Kaul asked for more time, saying,
“I need an hour. The other counsels have collectively argued for 5.5 hours. I should get at least an hour.”
The Chief Justice agreed,
“CJI agrees to allow Kaul 30 minutes today and additional time on Monday and then 45 minutes to SG.”
In his turn, Kaul addressed delays related to the ED’s attachment orders.
“I will show there was no delay on my part in implementing the plan. Despite NCLAT ruling ED’s property attachment illegal, ED pursued PMLA cases, insisting only a PMLA court could overturn it, until the Supreme Court ordered restitution on Dec 11, 2024. There was an escrow.”
He also questioned how anyone could invest under such uncertainty:
“Who would invest in an asset provisionally attached by the ED? This very issue led to the introduction of Section 32A. How can I put Rs 20,000 crore into such an asset? This is a matter between the CoC and me what standing does the promoter have to argue here? Yet he stands.”
Explaining the financial terminology, Kaul said,
“In EBITDA the B stands for before therefore it is not gross profit. When they say that the EBITDA was of 2000 crores that means nothing. Even when I took over in 2021 the company was in loss.”
The CJI, slightly confused, asked,
“I was under the impression that EBITDA was the profit.”
Kaul responded sharply:
“I can’t interrupt anyone but when you get the basics wrong you tend to make wrong arguments in court.”
Finally, the court ended the session for the day.
Case to be continued at 2 on Monday (Aug 11).
YESTERDAY IN TOP COURT
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).
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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.
CASE TITLE:
KALYANI TRANSCO LAW V M/S BHUSHAN POWER AND STEEL LTD. AND ORS.
C.A. No. 1808/2020
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