Would rather go for fresh bidding process: Erstwhile BPSL promoters to SC

Business Standard

3 days ago

The erstwhile promoters of Bhushan Power and Steel (BPSL) on Thursday told the Supreme Court that even though the resolution plan of BPSL was 'flawed', they would rather go for a fresh bidding process.
'If the plan is flawed, I don't want to go for liquidation. I want a fresh process. Even in liquidation, the first priority is to sell the company as a going concern,' Senior Advocate Dhruv Mehta, appearing for the erstwhile promoters of BPSL, told the Bench of Chief Justice of India (CJI) B R Gavai, Justice Satish Chandra Sharma, and Justice Vinod Chadran.
The apex court last Thursday recalled its 2 May judgment that declared JSW Steel Limited's resolution plan for BPSL 'illegal' and ordered the latter's liquidation—four years after the company was acquired under the Insolvency and Bankruptcy Code (IBC). A Division Bench led by the CJI had allowed the review of the 2 May judgment and decided to hear the appeal challenging the resolution plan afresh, after which the arguments continued on Thursday.
Mehta, who appeared for the BPSL promoters, told the apex court that the committee of lenders did not have the power to reopen or modify a resolution plan after it was approved. Responding to the question of his capacity to approach the court, he said any aggrieved person could approach the NCLT or NCLAT (appellate tribunal) to challenge the resolution plan.
Solicitor General Tushar Mehta, appearing for lenders of BPSL, however, said that BPSL was the creator of the problem since they siphoned off 'thousands of crores'. The court will now hear the arguments on Friday, when SG Mehta is expected to argue.
Last Thursday, the court had said the 2 May judgment did not appear to be in line with settled precedents and required reconsideration. Experts said the recall of the order in the context of IBC was certainly a rare incident.
'The present marks a 'first of its kind' instance which reflects a much larger principle that the Court is willing to reconsider its orders if deemed necessary in the larger interest,' said Shiv Sapra, Partner at Kochhar & Co.
Tushar Agarwal, Founder & Managing Partner of C.L.A.P. Juris, said recalling of orders via exercise of power under Article 142 is very rare and happens in the rarest of rare cases. 'In such cases of liquidation and challenge of NCLAT order, there are no precedents of recall of order,' he said.
Shri Venkatesh, Founding Partner of SKV Law Offices, said that similar to the exceptional intervention in the Bhushan Power case, the DMRC-DAMEPL case is another rare instance where the Supreme Court, at the curative stage, set aside an arbitral award despite the award having undergone four rounds of judicial scrutiny and being partially enforced, with significant sums paid and parties restructuring their affairs in reliance on its finality.
'Other cases wherein the Supreme Court has recalled its orders are the Ganpati Dealcom case (2024), wherein the Supreme Court recalled its 2022 judgment that struck down Sections 3 and 5 of the Benami Transactions Act,' he said.
Further, in the Vishnu Vardhan fraud case (2025), the Court applied the principle that 'fraud unravels everything' to set aside its own 2022 judgment in Reddy Veerana, he cited.
'Similarly, in the Karnail Singh land law case (2024), the Court recalled its 2022 verdict for failing to consider a Constitution Bench precedent, observing that 'ignoring the law laid down by the Constitution Bench of this Court would amount to a material error, manifest on the face of the order',' he said.