Kalyani Transco vs. M/s. Bhushan Power and Steel Ltd. & Ors. (CIVIL APPEAL) Supreme Court of India Judgment

I. Case Identification & Vitals

1. Court
Supreme Court of India

2. Case Title
Kalyani Transco vs. M/s. Bhushan Power and Steel Ltd. & Ors.

3. Document Type and Date of Judgment
Judgment, May 02, 2025

4. Case Number
CIVIL APPEAL/1808/2020; CIVIL APPEAL/2192-2193/2020; CIVIL APPEAL/3784/2020; CIVIL APPEAL/2225/2020; CIVIL APPEAL/3020/2020; CIVIL APPEAL/668/2021; CIVIL APPEAL/6390/2021

5. SCR Citation
NA

6. Neutral Citation
2025 INSC 621

7. Disposal Nature
Appeals Partly Allowed and Partly Disposed of

8. Case Type
CIVIL APPEAL

9. Law Applicable
Insolvency and Bankruptcy Law, Corporate Law, Company Law

10. Issue for Consideration
The central issue is the legality and validity of the resolution plan for Bhushan Power and Steel Ltd. (BPSL), which was approved by the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT). The Supreme Court had to determine whether the resolution process complied with the mandatory provisions of the Insolvency and Bankruptcy Code, 2016 (IBC), and whether the National Company Law Appellate Tribunal (NCLAT) had acted within its jurisdiction while modifying the approved plan and dealing with related issues, such as the attachment of assets by the Directorate of Enforcement (ED).

11. Headnote
The Supreme Court, in a significant ruling on corporate insolvency, rejected the resolution plan for Bhushan Power and Steel Ltd. (BPSL) submitted by JSW Steel, citing gross non-compliance with the mandatory provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). The Court found that the Resolution Professional and the Committee of Creditors (CoC) had failed in their statutory duties, and the resolution plan itself was in contravention of the law, particularly regarding the priority of payments to operational creditors. The Court also held that the National Company Law Appellate Tribunal (NCLAT) had acted without jurisdiction by entertaining an appeal from the successful resolution applicant on grounds not permitted by the IBC and by issuing directions on matters outside its purview, such as the attachment of assets by the Enforcement Directorate under the PMLA. Finding the entire process vitiated, the Court quashed the approval orders of the NCLT and NCLAT and directed the initiation of liquidation proceedings against BPSL.

12. Short Summary in Normal Language
The Supreme Court has cancelled the resolution plan for the debt-ridden company, Bhushan Power and Steel Ltd. (BPSL), and ordered its liquidation. The Court found that the entire resolution process, led by JSW Steel, was flawed and violated mandatory legal requirements. It criticized the Committee of Creditors and the Resolution Professional for their failures and ruled that the appellate tribunal (NCLAT) had overstepped its authority. This decision marks a major turning point in one of India’s most high-profile insolvency cases.

13. Bench

1. Hon’ble Justice Bela M. Trivedi
2. Hon’ble Justice Satish Chandra Sharma

14. Judgment Authored by
Hon’ble Justice Bela M. Trivedi*

II. Procedural & Factual Background

15. Case Start Date
NA

16. Case Arising From
This batch of appeals challenges a common judgment and order of the National Company Law Appellate Tribunal (NCLAT), New Delhi, dated February 17, 2020. The NCLAT had approved, with certain modifications, a resolution plan for Bhushan Power and Steel Ltd. (BPSL) that was submitted by JSW Steel. The NCLAT’s order was challenged by various stakeholders, including operational creditors, the erstwhile promoters of BPSL, and the Government of Odisha, who were all aggrieved by the terms of the approved plan and the manner in which the insolvency process was conducted.

17. Background and Facts
Bhushan Power and Steel Ltd. (BPSL) was one of the 12 large non-performing accounts, famously known as the “dirty dozen,” that the Reserve Bank of India directed banks to refer for insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). The Corporate Insolvency Resolution Process (CIRP) was initiated against BPSL in July 2017.

After a lengthy process involving multiple bidders, the Committee of Creditors (CoC) approved a resolution plan submitted by JSW Steel. This plan was subsequently approved by the National Company Law Tribunal (NCLT) on September 5, 2019, with certain conditions. However, various parties, including the successful resolution applicant (JSW), operational creditors, and the former promoters, were dissatisfied with the NCLT’s order and filed appeals before the National Company Law Appellate Tribunal (NCLAT).

A major complication arose when the Directorate of Enforcement (ED) provisionally attached BPSL’s assets under the Prevention of Money Laundering Act, 2002 (PMLA). The NCLAT, in its final order, not only modified the resolution plan but also ruled on the legality of the ED’s attachment, holding that it was without jurisdiction. This comprehensive order of the NCLAT was then challenged by all aggrieved parties in the Supreme Court.

18. Timeline

• July 26, 2017: The CIRP against BPSL was initiated by the NCLT.
• October 10, 2018: The CoC approved the resolution plan submitted by JSW Steel.
• February 14, 2019: The Resolution Professional filed an application before the NCLT for approval of the plan.
• September 5, 2019: The NCLT approved the resolution plan with certain conditions.
• October 10, 2019: The Enforcement Directorate (ED) provisionally attached the assets of BPSL.
• February 17, 2020: The NCLAT passed the impugned common judgment, modifying the resolution plan and setting aside the ED’s attachment.
• May 02, 2025: The Supreme Court set aside the orders of both the NCLT and NCLAT and directed the liquidation of BPSL.

19. Parties Involved

• Appellants: Kalyani Transco (Operational Creditor), Sanjay Singal & Anr. (Erstwhile Promoters), Government of Odisha, Jaldhi Overseas Pte. Limited (Operational Creditor), and others.
• Respondents: M/s. Bhushan Power and Steel Ltd. (Corporate Debtor), JSW Steel (Successful Resolution Applicant), Committee of Creditors (CoC), and others.

20. Procedural History

• Lower Court/Tribunal Decisions: The National Company Law Tribunal (NCLT) approved the resolution plan for BPSL submitted by JSW Steel, subject to certain conditions.
• Appeals: Multiple appeals were filed before the National Company Law Appellate Tribunal (NCLAT) by various stakeholders. The NCLAT passed a common judgment, modifying the NCLT’s order. The present batch of appeals in the Supreme Court challenges the NCLAT’s judgment.

III. Legal Analysis & Arguments

21. Issues Framed
Not explicitly framed, but the key issues analyzed by the Court were:

1. The maintainability of the appeals filed by various stakeholders, including the successful resolution applicant (JSW).
2. The legality of the resolution plan and whether it complied with the mandatory provisions of the IBC and its regulations.
3. The jurisdiction of the NCLAT to review a decision of a statutory authority like the Enforcement Directorate under the PMLA.
4. The consequences of the non-implementation of the approved resolution plan and the misuse of the legal process by the parties.

22. Areas of Debate

1. Whether a successful resolution applicant can be considered a “person aggrieved” to file an appeal against the approval of its own plan, even if it is challenging certain conditions imposed by the NCLT.
2. The scope of the NCLAT’s power under Section 61 of the IBC. Can it go beyond the specified grounds to modify a resolution plan or issue directions on matters not before the NCLT?
3. The interplay between the IBC and the PMLA. Does the NCLAT have the authority to rule on the legality of an attachment order passed by the ED?
4. What constitutes a valid exercise of “commercial wisdom” by the Committee of Creditors (CoC)?

23. Cases Cited by Petitioner/Appellant

• State Tax Officer vs. Rainbow Papers Limited ((2023) 9 SCC 545): Cited to argue that the resolution plan contravened the law by treating secured statutory dues as unsecured.
• Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Limited and Another ((2022) 2 SCC 401): Cited to argue that there should be no scope for negotiation after the approval of a resolution plan.
• Swiss Ribbons (P) Ltd. Vs. Union of India ((2019) 4 SCC 17): Cited by the State of Odisha on the administrative role of the Resolution Professional.

24. Cases Cited by Respondent/Defendant

• Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Others ((2020) 8 SCC 531): Cited by JSW to argue that the EBITDA generated during the CIRP period should not go to the creditors.
• Ghanashyam Mishra and Sons (P) Ltd. vs. Edelweiss Asset Reconstruction Co. Ltd. ((2021) 9 SCC 657): Cited to argue that once a resolution plan is approved, all claims not part of the plan are extinguished.

25. Acts/Rules/Orders Referred

1. Insolvency and Bankruptcy Code, 2016 (IBC)
   • Section 12: Prescribes the mandatory time limit for the completion of the CIRP. The Court found this was violated.
   • Section 29A: Lays down the eligibility criteria for a resolution applicant. The Court noted a failure by the Resolution Professional to properly verify compliance.
   • Section 30(2): Specifies the mandatory requirements that a resolution plan must fulfill. The Court found the plan to be in contravention of these requirements, especially regarding the priority of payment to operational creditors.
   • Section 31: Makes the approved resolution plan binding on all stakeholders.
   • Section 33: Mandates the liquidation of the corporate debtor if a resolution plan is not approved within the prescribed time. The Court invoked its power under Article 142 to direct liquidation based on this provision.
   • Section 61: Governs appeals to the NCLAT. The Court held that JSW’s appeal was not maintainable as it did not fall under the specified grounds.
2. Prevention of Money Laundering Act, 2002 (PMLA)
   • Section 5: Empowers the ED to provisionally attach property believed to be proceeds of crime. The Court held that the NCLAT had no jurisdiction to rule on the legality of an order passed under this Act.

26. Acts/Rules/Orders Governing the Case

1. Insolvency and Bankruptcy Code, 2016
2. Prevention of Money Laundering Act, 2002

27. Literature Citation
NA

28. Appearances for Parties

• Advocates:
  • For the Ex-Promoters: Mr. Dhruv Mehta, Senior Advocate
  • For Operational Creditors: Mr. Diwakar Maheshwari, Mr. Manu Beri, Mr. Arjun Asthana
  • For the State of Odisha: Mr. Natraj, ASG
  • For SRA-JSW: Mr. Neeraj Kishan Kaul, Senior Advocate
  • For the CoC: Dr. Abhishek Manu Singhvi, Senior Advocate
  • For the Resolution Professional: Mr. Shyam Diwan, Senior Advocate
• Witnesses: NA
• Other Persons: NA

29. Prayer
The appellants (operational creditors, ex-promoters, etc.) prayed for the setting aside of the NCLAT’s order and for various reliefs related to their claims and the legality of the resolution plan.

30. Evidence & Findings

1. Evidence: Minutes of the 18th and 19th meetings of the Committee of Creditors (CoC).
   • Findings: The minutes revealed that the CoC had flagged numerous issues of non-compliance by JSW but surprisingly approved the plan without any deliberation on these compliances. This, along with the CoC’s changing stance, led the Court to believe it had “played a very dubious role.”
2. Evidence: Application filed by the Resolution Professional before the NCLT.
   • Findings: The Court found that the Resolution Professional had failed to submit the mandatory Compliance Certificate in the prescribed Form ‘H’ and had not properly verified the eligibility of JSW under Section 29A of the IBC.

31. Petitioner/Appellant Arguments

1. The resolution plan was illegal as it violated the mandatory requirement of paying operational creditors in priority over financial creditors.
2. The Resolution Professional and the CoC failed in their statutory duties and colluded with the successful resolution applicant (JSW).
3. JSW deliberately delayed the implementation of the plan for years, which was a misuse of the process of law.
4. The NCLAT had no jurisdiction to rule on the ED’s attachment order or to grant reliefs that were not prayed for.

32. Respondent/Defendant Arguments

1. The appeals were not maintainable as the appellants were not “persons aggrieved” or had accepted payments under the plan.
2. The resolution plan had been successfully implemented, and the issues raised were now beyond the scope of an appeal under the IBC.
3. The commercial wisdom of the CoC in approving the plan should not be interfered with.
4. There was no delay in implementation, as the plan itself allowed for an extension of the effective date.

V. Judgment & Conclusion

33. Ratio Decidendi

1. The timelines prescribed under the Insolvency and Bankruptcy Code (IBC) are mandatory. A resolution plan submitted after the expiry of the maximum permissible period for the CIRP is liable to be rejected.
2. The Resolution Professional has a statutory duty to verify that a resolution plan complies with all mandatory provisions of the IBC, including the eligibility of the applicant under Section 29A and the priority of payments to operational creditors under Regulation 38.
3. The “commercial wisdom” of the Committee of Creditors (CoC) is not absolute. It cannot be exercised to approve a resolution plan that is in flagrant violation of the mandatory requirements of the law. A changing and contradictory stance by the CoC can raise doubts about the bona fides of its decisions.
4. The jurisdiction of the NCLT and NCLAT is confined to the provisions of the IBC. They do not have the power of judicial review over decisions made by other statutory authorities under different laws, such as an attachment order by the Enforcement Directorate under the PMLA. Such an exercise of power is coram non judice (without jurisdiction).
5. A party cannot be permitted to misuse the legal process by deliberately delaying the implementation of an approved resolution plan and then presenting the court with a fait accompli (an accomplished fact).

34. Final Decision

1. The judgments and orders of the NCLT (dated 05.09.2019) and the NCLAT (dated 17.02.2020) are quashed and set aside.
2. The Resolution Plan of JSW as approved by the CoC is rejected.
3. The NCLT is directed to initiate liquidation proceedings against the corporate debtor, Bhushan Power and Steel Ltd. (BPSL), under Chapter III of the IBC.
4. The appeals filed by the operational creditors and ex-promoters are allowed to the extent indicated.
5. The appeals filed by the State of Odisha regarding its claims are disposed of without any opinion on the merits, as the resolution plan has been rejected.

35. Legal Jargons and Maxims

1. CIRP (Corporate Insolvency Resolution Process): The process under the IBC to resolve the insolvency of a corporate debtor.
2. CoC (Committee of Creditors): A committee comprising the financial creditors of a corporate debtor, which takes key decisions during the CIRP.
3. Resolution Plan: A plan proposed by a resolution applicant for the revival of an insolvent company.
4. Functus Officio: A Latin term meaning “having performed his office.” It refers to a situation where an officer or body has completed their duties and no longer has any authority in the matter.
5. Coram non judice: A Latin term meaning “before a judge or court without jurisdiction.” It refers to a legal proceeding that is void because the court or tribunal did not have the legal authority to hear it.
6. Fait accompli: A French term for something that has already happened or been decided before those affected hear about it, leaving them with no option but to accept it.

36. Exhibits
NA

37. Key Learnings for Law Students and Legal Professionals
This judgment provides several important lessons for students and professionals, particularly in insolvency and corporate law:

1. The Mandatory Nature of IBC Timelines: The most important finding is the Court’s strict interpretation of the timelines prescribed under the IBC. It holds that the CIRP must be completed within the statutory period, and a failure to do so can lead to the rejection of a resolution plan and the initiation of liquidation. This underscores the “time-bound” nature of the IBC as one of its core principles.
2. The Duties of the Resolution Professional and CoC: The judgment serves as a strong reminder of the statutory duties of the Resolution Professional (RP) and the Committee of Creditors (CoC). The RP is not merely a facilitator but an “invigilator” who must ensure compliance with all mandatory provisions. Similarly, the “commercial wisdom” of the CoC is not a license to approve a plan that violates the law. Both are accountable for their actions.
3. The Limited Jurisdiction of NCLT/NCLAT: The case clearly delineates the jurisdictional boundaries of the NCLT and NCLAT. It establishes that these tribunals, being creatures of the IBC and Companies Act, cannot exercise powers of judicial review over actions taken by other statutory authorities under different laws (like the PMLA). This is a crucial clarification on the separation of powers between different legal regimes.
4. The Principle of No Abuse of Process: The Court came down heavily on the successful resolution applicant for what it perceived as “delaying tactics” and “misuse of the process of law.” This teaches that parties cannot use the pendency of litigation as a shield to avoid their contractual and statutory obligations under an approved resolution plan.
5. The Consequences of Non-Compliance: The final decision to order the liquidation of a major company like BPSL, despite an approved resolution plan being in place, is a powerful lesson in itself. It demonstrates that the Supreme Court will not hesitate to take the ultimate step of liquidation if it finds that the entire resolution process has been vitiated by gross and wilful non-compliance with the law.

Important keyword related to this judgment
Insolvency and Bankruptcy Code (IBC), Bhushan Power and Steel Ltd (BPSL) Case, JSW Steel Resolution Plan, Supreme Court on IBC Timelines, Commercial Wisdom of CoC, NCLAT Jurisdiction under PMLA, Liquidation under IBC, Section 29A IBC Eligibility, Kalyani Transco vs Bhushan Power, Corporate Insolvency Resolution Process.