Supreme Court upholds JSW resolution plan for Bhushan Power and Steel

The Supreme Court on Friday dismissed appeals challenging JSW Steel’s ₹19,700 crore resolution plan for Bhushan Power and Steel Limited (BPSL) [Kalyani Transco v. Bhushan Power & Steel Limited].

A Bench of Chief Justice of India (CJI) BR Gavai and Justices Satish Chandra Sharma and Vinod Chandran said,

"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."

It also noted that JSW invested huge amounts in making BPSL a profit-making company and cannot be penalised for doing so.

The matter arises from the Court’s May 2, 2025 judgment which struck down JSW Steel’s plan and ordered BPSL’s liquidation under Article 142 of the Constitution. That ruling by Justices Bela M Trivedi and Satish Chandra Sharma had held that the CoC erred in approving the plan.

JSW Steel, chosen as the successful resolution applicant in 2019, 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). The Enforcement Directorate (ED) challenged the plan citing alleged money laundering by BPSL’s former promoters.

On July 31, the Supreme Court recalled its May 2 judgment, noting that it may have misapplied settled Insolvency and Bankruptcy Code (IBC) principles and relied on inaccurate or unargued points. It thus decided to rehear the matter.

During the hearings, the CoC, represented by Solicitor General Tushar Mehta, claimed that JSW must pay Bhushan Power the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as it had not taken over the company as planned. The erstwhile promoter of BPSL told the 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. The promoters had also argued that the CoC could not have extended the time for implementing the resolution plan as it had become functus officio after the approval of the plan by NCLT.

Senior Advocate Neeraj Kishan Kaul, for JSW Steel, underscored that the company had taken over a loss-making entity and fulfilled its commitments despite prolonged delays caused by the ED in attachment of assets. Even when the Resolution Professional (RP) began managing BPSL in 2021, he noted, the company continued to record net losses.

On the other hand, Senior Advocate Dhruv Mehta, for the erstwhile promoters, maintained that once a resolution plan is approved, the CoC becomes functus officio and cannot revisit its terms. He further argued that bids are based on profits and losses, not EBITDA, and that subsequent profitability cannot justify reopening a concluded plan.

SG Mehta was briefed by a team from Cyril Amarchand Mangaldas comprising L.Viswanathan (Senior Partner), Raunak Dhillon (Partner), Uday Khare (Partner), Aishwarya Gupta (Principal Associate), Isha Malik (Principal Associate) and Anchit Jasuja (Associate).

The RP 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 Advocate Gopal Jain represented JSW alongside Kaul. 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.

Senior Advocate Pinaki Misra represented Bhushan Power and Steel Limited. He was briefed by a team from Karanjawala & Co, led by its partner Tahira Karanjawala