The Supreme Court heard intense arguments in the Bhushan Power case, with JSW Steel defending delays and promoters alleging market-driven execution. Verdict has been reserved after a heated exchange of claims and counterclaims.
New Delhi: On August 11, the Supreme Court heard final arguments in the high-profile Bhushan Power & Steel Limited case, with Senior Advocates representing both sides presenting strong submissions before a bench comprised Chief Justice of India B.R. Gavai, Justice Satish Chandra Sharma, and Justice Vinod Chandran.
The matter revolves around the delay in implementing the approved resolution plan under the Insolvency and Bankruptcy Code (IBC) and the roles of the Committee of Creditors (CoC), the successful resolution applicant JSW Steel, and the promoters.
During the hearing, Senior Advocate Kaul, appearing for JSW Steel, defended the delay in implementation of the resolution plan, attributing it to external factors and not to any inaction on his part.
He stressed,
“They themselves say that implementation has been delayed due to the attachment and now everyone has come at me as if I was sitting and relaxing. If this is done it will open floodgates because they someday decided that they want 6000 crores extra.”
Kaul further argued that without a clear assurance or arrangement regarding the return of funds, he could not proceed with payments.
He told the court,
“The delay is not mine and I cant give you money without an assurance or arrangement that you will give it to me.”
Continuing, Kaul said he was being unfairly targeted despite having fought throughout the process against the Enforcement Directorate’s (ED) unyielding approach.
He remarked,
“A promoter is accusing me of not implementing the plan, but I’ve been fighting all along. I’ve shown that the ED has been insistent and unyielding, yet I’m being blamed for the delay.”
He also challenged the promoters’ right to raise objections at this stage, stating,
“Promoters have no standing to question me when the CoC is satisfied. If the appeal is allowed, I willl get the money back, but after turning the company around, I’m being asked to give it all up. The only proceedings where promoters can intervene are those involving”
On the legal framework, Kaul pointed out,
“Implementation plan is under 39 clause 9 of the IBC and the creditor can move not the promoter.”
He further argued that the operational creditors (OCs) themselves had treated certain claims as contingent liabilities, and foreign arbitration awards could not be automatically enforced as Indian court decrees.
He said,
“The OCs themselves told the NCLT these were contingent liabilities, and the books reflected the same. A foreign award doesn’t automatically become an Indian court decree. I’ve been diligent the only reason I didn’t implement was that my plan was for an unencumbered going”
Senior Advocate Dhruv Mehta, representing the promoters, strongly contested Kaul’s stand.
He argued,
“My learned friend wants the facts to be moulded to suit the case.”
The CJI interjected, noting that Kaul’s arguments were based on the CoC’s stand. To this, Mehta responded,
“The CoC’s position has been consistent. They have maintained that JSW has not met the condition precedent and has no funding arrangement.”
Mehta further highlighted the dual role of promoters as guarantors, asserting,
“Promoters may not get a copy of the plan, but they often give personal guarantees. My role is both as promoter and guarantor, and this is not a new contention. Denying me locus goes against settled law.”
He cautioned against allowing the CoC to retain powers after plan approval, saying,
“CoC’s powers should not continue once the plan is approved by both CoC and NCLT; that would be a dangerous precedent.”
Responding to a query from the CJI on delayed payments, Mehta suggested,
“The matter should go to NCLT.”
The CJI also pointed out that in the ESSAR judgment, the National Company Law Appellate Tribunal (NCLAT) had denied EBITDA to the CoC, asking whether that was merely obiter. Solicitor General Mehta clarified,
“That point was never decided; the ESSAR remark came in an appeal against an NCLAT order.”
The CJI observed,
“Prima facie since they recover their dues CoC should remain involved.”
However, Mehta maintained,
“Implementation can be overseen by a monitoring committee not the CoC. Once the plan is approved, CoC becomes functus officio with no role in feasibility or modification.”
He also accused Kaul of misrepresenting financial terms, stating,
“Mr. Kaul is equating EBITDA to Profit After Tax (PAT).”
Finally, Mehta alleged that market conditions influenced the timing of implementation rather than legal restrictions.
ALSO READ: Supreme Court Scraps JSW Steel’s Rs 19,700 Cr Deal, Orders Bhushan Power Liquidation
He claimed,
“There was no ED attachment or Supreme Court stay on implementing the plan. ED only questioned how NCLT/NCLAT could lift provisional attachment. The plan was executed only after steel prices rose. My loss cannot be their gain the plant is worth ₹26,000 crore, they beat Tata Steel by promising ₹7,000 crore in working capital, which they never infused. This is fraud.”
The legal representation in this case is spread across several high-profile teams. The CoC was represented by Solicitor General Tushar Mehta, assisted by a team from Cyril Amarchand Mangaldas which included Partners Raunak Dhillon and Uday Khare, Principal Associates Aishwarya Gupta and Isha Malik, and Associate Anchit Jasuja.
The resolution professional was represented by Senior Advocate Navin Pahwa along with a team from Shardul Amarchand Mangaldas, comprising Advocates Misha, Vaijayant Paliwal, Charu Bansal, Nikhil Mathur, and Kirti Gupta.
JSW Steel’s legal team included Senior Advocate Gopal Jain alongside Kaul. They were briefed by teams from AZB & Partners and Karanjawala & Co. The AZB team featured Senior Partner Rajendra Barot, Partners Vivek Shetty and Suharsh Sinha, and Advocates Sherna Doongaji and Akilesh Menezes.
The Karanjawala & Co. team included Senior Partner Nandini Gore, Partner Tahira Karanjawala, and Advocates Swati Bhardwaj, Akarsh Sharma, Shreyas Maheshwari, Manvi Rastogi, Sharanya Ghosh, and Mahek Karanjawala.
The hearing concluded with the Bench reserving its judgment.
Background Of The Case
In earlier hearings of the Bhushan Power case, the Committee of Creditors (CoC) had argued that the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) earned from Bhushan Power & Steel Limited (BPSL) should be paid to it by JSW Steel, since the company had not been taken over as planned.
The former promoter of BPSL told the Supreme Court that liquidation was never the goal of the insolvency process. Instead, he suggested that a fresh corporate insolvency resolution process (CIRP) should be started if JSW Steel’s resolution plan was found to have serious flaws.
The promoters also insisted that the CoC had no authority to extend the time for implementing the plan, as it had already become functus officio (its role ended) once the National Company Law Tribunal (NCLT) had approved the plan.
This dispute stems from the Supreme Court’s judgment on May 2, 2025, in which the Court struck down JSW Steel’s resolution plan and ordered the liquidation of BPSL under Article 142 of the Constitution.
That ruling, delivered by Justices Bela M. Trivedi and Satish Chandra Sharma, held that the CoC had made an error in approving the plan.
JSW Steel had been chosen as the successful resolution applicant in 2019 with an offer of over ₹19,000 crore to the creditors. The NCLT approved the plan in September 2019, and the National Company Law Appellate Tribunal (NCLAT) upheld the approval. However, the Enforcement Directorate (ED) challenged the plan, citing allegations of money laundering against BPSL’s former promoters.
On July 31, 2025, the Supreme Court decided to recall its earlier May 2 judgment, noting that the Court may have misapplied settled IBC principles and relied on facts or arguments that were either inaccurate or not properly presented. This led the Court to reopen the case for a complete rehearing.
Case title:
Kalyani Transco v. Bhushan Power & Steel Limited
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