Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(SC) 1745

SUPREME COURT OF INDIA
B.R. GAVAI, C.J.I., SATISH CHANDRA SHARMA, K. VINOD CHANDRAN, JJ.
Kalyani Transco – Appellant
Versus
M/s Bhushan Power And Steel Limited And Others – Respondents
Civil Appeal No. 1808 of 2020 With Civil Appeal No. 2192-2193 of 2020, Civil Appeal No. 2225 of 2020, Civil Appeal No. 3020 of 2020, Civil Appeal No. 6390 of 2021
Decided on : 26-09-2025

Advocates appeared:
For the Appellant(s) : Mr. Dhruv Mehta, Sr. Adv. Mr. Sandeep Bajaj, Adv. Mr. Soayib Qureshi, Adv. Mr. Anubhav Ray, Adv. Ms. Chetna Alagh, Adv. Ms. Anchal Kushwaha, Adv. Mr. Mayank Biyani, Adv. Ms. Ranjeeta Rohatgi, AOR Mr. Nikhil Sabri, Adv. Mr. Aman Qayoom Wani, Adv. Ms. Shrika Gautam, Adv. Mr. Arjun Asthana,Adv. Mr. Sidhartha Sharma,Adv. Ms. Shubhangi Gupta,Adv. Mr. Nachiket Chawla,Adv. Ms. Prachi Sharma,Adv. Mr. Arup Banerjee, AOR Mr. Diwakar Maheshwari,Adv. Ms. Pratiksha Mishra,Adv. Mr. Mayank Kshirsagar, AOR Mr. Sandeep Bajaj, Adv. Mr. Mayank Biyani, Adv. M/S. Law Associates, AOR Mr. Manu Beri, Adv. Mr. Varun Varma, Adv. Ms. Kudrat Mann, Adv. Mr. Upmanyu Tewari, AOR
For the Respondent(s): Mr. Tushar Mehta, Solicitor General Mr. L. Vishwanathan, Adv. Mr. Raunak Dhillon, Adv. Mr. Uday Khare, Adv. Ms. Aishwarya Gupta, Adv. Ms. Isha Malik, Adv. Mr. Nihaad Dewan, Adv. Mr. Anchit Jasuja, Adv. Ms. Bhawna Lakhina, Adv. Mr. Bhuvan Kapur, Adv. Mr. Aman Mehta, Adv. For M/s. Cyril Amarchand Mangaldas Mr. Neeraj Kishan Kaul, Sr. Adv. Mr. Gopal Jain, Sr. Adv. Ms. Nandini Gore, Adv. Mr. Rajendra Barot, Adv. Ms. Tahira Karanjawala, Adv. Mr. Vivek Shetty, Adv. Mr. Suharsh Sinha, Adv. Ms. Swati Bhardwaj, Adv. Mr. Akarsh Sharma, Adv. Ms. Manvi Rastogi, Adv. Mr. Pranav Garg, Adv. Ms. Sherna Doongaji, Adv. Mr. Akilesh Menezes, Adv. Mr. Harsh Sethi, Adv. Ms. Isha Patil, Adv. Mr. Deepak Joshi, Adv. Ms. Dhanya S. Krishnan, Adv. Mr. Varun Tyagi, Adv. For M/s. Karanjawala & Co. Mr. Tushar Mehta, Solicitor General Mr. K.M. Nataraj, A.S.G. Mr. Sudarshan Lamba, AOR Ms. Kanu Agrawal, Adv. Mr. Mohd. Akhil, Adv. Mr. Saurav Roy, Adv. Mr. Vinayak Sharma, Adv. Mr. Pratyush Shrivastava, Adv. Mr. S. S. Shroff, AOR Ms. Misha, Adv. Mr. Vaijayant Paliwal, Adv. Ms. Charu Bansal, Adv. Ms. Kirti Gupta, Adv. Mr. Soayib Qureshi, AOR Mr. Soumya Dutta, AOR Mr. Mukesh Kumar Maroria, AOR Dr. Vinod Kumar Tewari, AOR

Resolution plans under the Insolvency and Bankruptcy Code must be implemented strictly according to their terms without reopening claims not included in them, preserving the commercial wisdom of the Committee of Creditors.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30, 31, and 32A - An appeal was filed by erstwhile promoters & operational creditors against rejection of a resolution plan and approval of the NCLT/NCLAT. The Supreme Court concluded the resolution plan was invalid, leading to liquidation under section 33 due to its non-conformance with the Code. (Paras 84, 85, 191)

(B) Resolution Plan Approval - The Supreme Court held that claims not part of a resolution plan could not be reopened post-approval, affirming the non-justiciability of the CoC's commercial decision. (Paras 164, 169)

Facts of the case:
The appeal arose after NCLT approved a resolution plan for a corporate debtor amidst numerous challenges, including FIRs against the management and intricacies of financial obligations. The corporate debtor failed to implement the resolution plan timely due to external legal proceedings and challenges to the approved plan. (Paras 2.1 - 2.27)

Findings of Court:
The Court found the resolution plan non-compliant with the IBC provisions leading to initiation of liquidation proceedings against the corporate debtor after quashing previous orders of the NCLT/NCLAT. The SRA's obligations under the resolution plan regarding payment priorities were also found inadequate. (Paras 84, 191)

Issues: The Court addressed whether the former promoters had locus standi to appeal, if the CoC could extend the implementation period of a resolution plan, & the treatment of claims on EBITDA. (Paras 6, 97, 130)

Ratio Decidendi: The decision stipulates that once a resolution plan is approved, it must be executed as per its provisions without reopening claims that were outside it. Commercial wisdom of the CoC is not subject to judicial scrutiny unless specific grounds under the IBC are met. (Paras 169, 190)

Result: The appeals were dismissed, with the NCLAT’s ruling being upheld and liquidation proceedings mandated. (Paras 191)

Table of Content
1. various appeals under ibc against nclat judgment. (Para 1)
2. facts about the corporate debtor's cirp. (Para 2)
3. legal arguments about locus standi of promoters. (Para 3 , 4 , 5)
4. arguments on validity of resolution plan. (Para 6 , 7 , 8 , 9)
5. claims related to the implementation and payment terms. (Para 10 , 11 , 12 , 13)
6. issues surrounding ebitda distribution. (Para 14 , 15 , 16 , 17)
7. court's procedural observations on the appeals. (Para 52 , 53 , 57 , 58)
8. final conclusion on the merit of appeals. (Para 185 , 186 , 190 , 191)

JUDGMENT :

B.R. GAVAI, CJI

	INDEX
I.	INTRODUCTION
II.	FACTS
III.	SUBMISSIONS
i.	Appellants in Civil Appeal Nos. 2192 – 2193 of 2020 (erstwhile promoters)
ii.	Appellants in Civil Appeal No. 2225 of 2020 (Jaldhi Overseas Pte. Limited)
iii.	Appellants in Civil Appeal No. 3020 of 2020 (M/s. Medi Carrier Private Limited) and Civil Appeal No. 6390 of 2021 (CJ Darcl Logistics Limited)
iv.	Resolved Entity – BPSL
v.	Resolution Professional
vi.	Committee of Creditors
vii.	Successful Resolution Applicant – JSW
viii.	Submissions in Rejoinder
iv.	ANALYSIS
a.	Locus standi of the erstwhile promoters
b.	Existence of the CoC after approval of the Resolution Plan by the Adjudicating Authority
c.	Grounds of Appeal
d.	Legality of clause permitting CoC to extend the period for implementation of the Resolution Plan
e.	Delay in implementation of the Resolution Plan
f.	Contravention of law
g.	Upfront infusion of funds by the SRA – JSW
h.	Distribution of EBITDA
i.	Contingent claim of Jaldhi
j.	Pre-CIRP dues of Medi and Darcl
V.	CONCLUSION

	LIST OF ABBREVIATIONS
1.	Arbitration Act	Arbitration and Conciliation Act, 1996
2.	BPSL	M/s Bhushan Power and Steel Limited
3.	CBI	Central Bureau of Investigation
4.	CCD	Compulsorily Convertible Debentures
5.	CIRP	Corporate Insolvency Resolution Proceedings
6.	CoC	Committee of Creditors
7.	CRP	Consolidated Resolution Plan
8.	Darcl	CJ Darcl Logistics Limited
9.	EBITDA	Earnings Before Interest, Taxes, Depreciation, and Amortisation
10.	ED	Directorate of Enforcement
11.	FC	Financial Creditors
12.	FIR	First Information Report
13.	IBBI	(CIRP) Regulations Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
14.	IBC or The Code	Insolvency and Bankruptcy Code, 2016
15.	India-Singapore CECA	India-Singapore Comprehensive Economic Cooperation Agreement
16.	IPC	INDIAN PENAL CODE , 1860
17.	IRP	Interim Resolution Professional
18.	Jaldhi	Jaldhi Overseas Pte. Limited
19.	JSW	JSW Steel Limited
20.	Medi	M/s. Medi Carrier Private Limited
21.	NCLAT	National Company Law Appellate Tribunal, New Delhi
22.	NCLT or Adjudicating Authority	National Company Law Tribunal, New Delhi, Principal Bench
23.	OC	Operational Creditor
24.	PAO	Provisional Attachment Order
25.	PC Act	Prevention of Corruption Act, 1988
26.	PMLA	Prevention of Money Laundering Act, 2002
27.	PRA	Prospective Resolution Applicants
28.	RBI	Reserve Bank of India
29.	RfRP	Request for Resolution Plan
30.	RP	Resolution Professional
31.	SRA	Successful Resolution Applicant

I. INTRODUCTION

1. This batch of six appeals are filed under Section 62 of the Insolvency and Bankruptcy Code, 2016¹[“IBC” or “the Code” for short.] by erstwhile promoters and various Operational Creditors of the Corporate Debtor against the common final impugned judgment and order dated 17th February 2020 passed by the National Company Law Appellate Tribunal, New Delhi²[“NCLAT” for short.] in relation to the Corporate Insolvency Resolution Proceedings³[“CIRP” for short.] of M/s Bhushan Power and Steel Limited. ⁴[“BPS

Click Here to Read the rest of this document

2025 Supreme(SC) 1745

Resolution plans under the Insolvency and Bankruptcy Code must be implemented strictly according to their terms without reopening claims not included in them, preserving the commercial wisdom of the Committee of Creditors.

Cases Referred (24)

Related Judgments

Samcar Glass Ltd. VS Commissioner of Central Exicse, Jaipur

Plastikos Packaging VS Commissioner of Central Excise, Allahabad

SYSTEMS MANUFACTURING LTD VS SYSTEMS EMPLOYEES ASSOCIATION - 2000 Supreme(Kar) 665

JOGENDRA SINGH VS SURESH MANJULAPUR - 2000 Supreme(Kar) 662

MYSORE WINE PRODUCTS AND ALLIED CO. LTD. , BANGALORE VS PRESIDING OFFICER, INDUSTRIAL TRIBUNAL, BANGALORE - 2000 Supreme(Kar) 663

Bose VS State, rep. by Inspector of Police, Salaikiramam P. S. , - 2000 Supreme(Mad) 1273

Jain Construction Company VS State of Rajasthan - 2000 Supreme(Raj) 912

Voltas Limited VS Joint Collector, Medak - 2000 Supreme(AP) 945

STATE OF BIHAR VS SURENDRA SINGH RAUTELA ALIAS BENGALI - 2000 Supreme(Jhk) 45

Krishna Kumar VS Gulab Khan - 2000 Supreme(Raj) 1546