We want fresh resolution process, not liquidation: Ex-Bhushan Power promoters to Supreme Court

The erstwhile promoters of Bhushan Power and Steel Ltd (BPSL) on Thursday told the Supreme Court that liquidation of the company was not the objective, and that a fresh corporate insolvency resolution process (CIRP) should be initiated if JSW's resolution plan is found to be flawed.

Senior Advocate Dhruv Mehta, appearing for the promoters, submitted that once a resolution plan is approved by the Adjudicating Authority, the role of the Committee of Creditors (CoC) comes to an end and it cannot continue to assert decision-making authority.

"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,” Mehta said.

He argued that the statutory scheme under the Insolvency and Bankruptcy Code (IBC) does not allow the CoC to reopen or modify a plan post-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."

Responding to arguments that value accretion justified a revisit of the plan, Mehta submitted that the scheme of IBC does not permit reopening of approved plans merely on commercial considerations or subsequent profitability. The focus must remain on the legality and procedural regularity of the plan as approved, he said.

Separately, the erstwhile promoter also pointed out that under the IBC, “any person aggrieved” can challenge the resolution plan before the NCLT and NCLAT.

“There are two judgments of this court which say that I am entitled to get the resolution plan and I can challenge it,” he submitted.

A Bench led by Chief Justice of India BR Gavai and comprising Justices Satish Chandra Sharma and Vinod Chandran will continue hearing the case tomorrow, when Solicitor General Tushar Mehta is expected to continue his arguments.

On July 31, the Supreme Court had recalled its controversial May 2, 2025 judgment that had rejected JSW Steel’s ₹19,700 crore resolution plan for BPSL and ordered the company’s liquidation.

The Court admitted that the earlier decision may have misapplied settled legal principles under the IBC.

A Bench of CJI Gavai and Justice Satish Chandra Sharma observed that the May 2 ruling did not correctly consider the legal position as laid down in a “catena of judgments.” It further noted that the judgment had taken into account certain factual aspects and arguments that were either inaccurate or never advanced during the original hearing.

In its May 2 judgment, a Bench of Justices Bela M Trivedi and Satish Chandra Sharma had held that the CoC erred in approving JSW Steel’s resolution plan for BPSL. The Court declared the plan illegal and ordered BPSL’s liquidation using its inherent powers under Article 142 of the Constitution of India.

JSW Steel, which had been selected as the successful resolution applicant in 2019, had offered over ₹19,000 crore to creditors. The plan was approved by the National Company Law Tribunal (NCLT) in September 2019 and upheld by the National Company Law Appellate Tribunal (NCLAT), even as the Enforcement Directorate (ED) challenged the plan on grounds of alleged money laundering by BPSL’s former promoters.

The May 2 ruling sent shockwaves through the insolvency ecosystem. The Court questioned the implementation of the resolution plan and invoked Article 142 of the Constitution to undo a resolution already approved by statutory authorities and implemented by JSW Steel, raising concerns among investors and practitioners about the sanctity and finality of IBC-approved plans.

Review petitions came to be filed against the judgment, after which the Court decided to hear the case afresh.

When the matter was heard on August 1, Solicitor General Tushar Mehta, appearing for the CoC, submitted that the May 2 judgment raised no substantial question of law and was based on speculative reasoning. He also highlighted that Section 29A of the IBC—dealing with disqualification of resolution applicants—was never invoked in this case, yet the judgment was replete with findings on that provision.

Mehta pointed out that JSW Steel has been operating BPSL since 2021, employing over 25,000 people and turning it into a viable company.

“We should also look at the larger picture—25,000 people cannot be thrown on the road,” CJI Gavai remarked in agreement.

SG Mehta was briefed by a team from Cyril Amarchand Mangaldas comprising 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 with a team from Shardul Amarchand Mangaldas comprising Advocates Misha, Vaijayant Paliwal, Charu Bansal, Nikhil Mathur and Kirti Gupta.

Senior Advocates Gopal Jain and Neeraj Kishan Kaul represented JSW. They were briefed by teams from AZB & Partners and Karanjawala & Co. The AZB team comprised Senior Partner Rajendra Barot and Partners Vivek Shetty, Suharsh Sinha along with Advocates Sherna Doongaji and Akilesh Menezes.

The Karanjawala team comprised Nandini Gore (Senior Partner), Tahira Karanjawala (Partner) with Advocates Swati Bhardwaj, Akarsh Sharma, Shreyas Maheshwari, Manvi Rastogi, Sharanya Ghosh and Mahek Karanjawala.