SC continues hearing on JSW Steel's BPSL resolution plan: ex-promoters, creditors, and state present arguments

United News of India

5 days ago

New Delhi, Aug 7 (UNI) The Supreme Court today continued hearings in the high-stakes dispute over JSW Steel's resolution plan for Bhushan Power and Steel Limited (BPSL).
The matter was heard by a bench, comprising Chief Justice of India B.R. Gavai, Justices Satish Chandra Sharma, and K. Vinod Chandran.
The current proceedings follow the Supreme Court's July 31, 2025, order, which allowed review petitions filed by JSW Steel, the Committee of Creditors (CoC), and others challenging the Court's earlier May 2 judgment that had rejected the resolution plan and ordered BPSL's liquidation.
The case stems from a batch of civil appeals concerning JSW Steel's Rs 19,700 crore resolution plan, which had received approval from the CoC during the Corporate Insolvency Resolution Process (CIRP) and was subsequently cleared with modifications by the NCLT and NCLAT.
Appeals were filed by multiple stakeholders, including the Directorate of Enforcement (ED), operational creditors (such as Kalyani Transco, Jaldhi Overseas, Medi Carrier, C J Darcl Logistics), the State of Odisha, and former promoters like Sanjay Singal.
Senior Advocate Dhruv Mehta, appearing for Sanjay Singal, argued that JSW Steel failed to implement the resolution plan within the stipulated time under the IBC.
He alleged that JSW did not bring in the committed equity infusion and instead substituted it with compulsory convertible debentures, undermining the plan's objectives.
He further contended that once the resolution plan is approved, the CoC has no authority to modify it, as there is no express provision under the IBC for post-approval alterations.
On the issue of EBIDTA during CIRP, Mehta cited the NCLT's direction that such earnings must flow to creditors and relied on the Supreme Court's ESAAR judgment, which allowed similar treatment based on the resolution plan's request-for-proposal (RFP) conditions.
Operational creditors presented their arguments next. The State of Odisha's claim for entry tax was dismissed on the ground that it was not filed within the prescribed deadline before the Resolution Professional.
The claim for electricity dues, though filed in time, had not been contested when reduced. The bench dismissed both claims.
Solicitor General Tushar Mehta, appearing for the CoC, began his submissions by defending the concurrent findings of the NCLT and NCLAT.
He identified three core issues, maintainability of the appeal by ex-promoters; Distribution of EBIDTA generated during CIRP to creditors and the inappropriateness of judicial interference with the CoC's commercial wisdom, especially given the conduct of the former promoters.
He also noted that many arguments raised now by ex-promoters were not submitted before lower forums.
Further, in a shift from its previous position, the CoC sought interest for delays in the implementation of the resolution plan.
SG Mehta will continue his submissions tomorrow at 2 PM, followed by Senior Advocate Neeraj Kishan Kaul, who appears for JSW Steel.
JSW Steel Ltd is represented by Senior Advocates Neeraj Kishan Kaul and Gopal Jain, with legal teams from Karanjawala & Co.: Nandini Gore (Senior Partner), Tahira Karanjawala (Partner), Swati Bhardwaj, Akarsh Sharma, Manvi Rastogi, Sharanya Ghosh, and Pranav Garg.
AZB & Partners: Rajendra Barot (Senior Partner), Vivek Shetty, Suharsh Sinha, and Akhilesh Menezes.
The Committee of Creditors is represented by SG Tushar Mehta, assisted by Raunak Dhillon.
The Resolution Professional is represented by Senior Advocate Shyam Divan and Shardul S. Shroff.
The matter remains under active hearing before the Supreme Court and is likely to have significant implications for insolvency jurisprudence and investor confidence in resolution processes under the IBC.
UNI SNG SS