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Kalyani Transco vs. M/s Bhushan Power and Steel Limited & Ors.

Not available · 2025 INSC 1165Decided 26 Sept 2025
Not available
Chief Justice B.R. Gavai · Justice Satish Chandra Sharma · Justice K. Vinod Chandran

Background

Bhushan Power and Steel Limited (BPSL) was one of the "dirty dozen" large corporate defaulters identified by the RBI in 2017, and insolvency proceedings against it were admitted before the National Company Law Tribunal (NCLT) on a petition by Punjab National Bank. After a competitive bidding process among thirteen potential resolution applicants, JSW Steel Ltd.'s plan was approved by the Committee of Creditors (CoC) and, subject to conditions, by the NCLT in September 2019. A CBI FIR and an Enforcement Directorate money-laundering case were also registered against BPSL and its erstwhile promoters around this time. This judgment decides a batch of six appeals filed by BPSL's erstwhile promoters, an operational creditor (Jaldhi Overseas), and two other operational creditors (Medi Carrier and CJ Darcl Logistics) against the common NCLAT order that upheld the JSW resolution plan.

Decision Breakdown

The Supreme Court dismissed all the appeals and upheld the NCLAT's judgment approving JSW Steel's resolution plan. It held that the erstwhile promoters had no locus to challenge the CoC's commercial decisions once a resolution plan is approved, since Supreme Court precedent (K. Sashidhar) makes the CoC's commercial wisdom non-justiciable except on the narrow statutory grounds. The Court rejected arguments about delay in implementing the plan, alleged illegal clauses extending the implementation timeline, and disputes over how EBITDA earned during the delay should be distributed, noting that the resolution request documents never provided for EBITDA distribution and that reopening settled issues at this late stage would undermine the finality the IBC guarantees to approved plans. It similarly rejected Jaldhi's claim to be treated as more than a contingent creditor and Medi/Darcl's claims for pre-CIRP dues, finding no evidence the CoC had approved such payments. The Court emphasized that BPSL had been transformed from a loss-making company into a profitable, going concern under JSW's stewardship, and reopening the plan now would open a "Pandora's Box" defeating the IBC's purpose.

Lesson Learnt

Once a resolution plan is approved by the Committee of Creditors and the NCLT under the IBC, courts will not second-guess the CoC's commercial decisions or allow new claims (like disputes over profits earned after resolution, or dues not part of the approved plan) to be raised belatedly: finality of an approved resolution plan is central to how India's insolvency law is meant to work.

Official source (sci.gov.in)View Judgment (PDF)

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