SC reserves verdict on JSW Steel’s Rs 19,700 crore resolution plan for Bhushan Power

New Delhi: The Supreme Court on Monday reserved its verdict on a batch of pleas related to JSW Steel’s Rs 19,700-crore resolution plan for debt-ridden Bhushan Power and Steel Limited (BPSL).

A special bench comprising Chief Justice B R Gavai and Justices Satish Chandra Sharma and K Vinod Chandran heard arguments from Solicitor General Tushar Mehta for the committee of creditors (CoC), senior advocate Neeraj Kishan Kaul for JSW Steel, and senior advocate Dhruv Mehta for the former promoters before reserving the verdict.

As many as five pleas were heard afresh after the CJI-led bench, on July 31, recalled its May 2 verdict that had directed liquidation of BPSL and set aside JSW’s resolution plan, criticising the conduct of the CoC, the resolution professional, and the National Company Law Tribunal (NCLT) for what it termed a “flagrant violation” of the Insolvency and Bankruptcy Code (IBC).

One of the key issues was whether earnings before interest, tax, depreciation, and amortisation (EBITDA) generated during the resolution period should go to the creditors or remain with the company.

The CoC is seeking Rs 3,569 crore in EBITDA and Rs 2,500 crore in delay-related interest. Kaul, representing JSW, the successful resolution applicant, said neither the request for resolution plan (RFRP) nor the resolution plan itself mandated sharing EBITDA with creditors.

He said JSW bid for BPSL on an “as is, where is” basis, accepting both its losses and profits, and that the delay in plan implementation was due to the ED’s asset attachment, which was lifted only in December 2024.

Dhruv Mehta, appearing for the former promoters, challenged JSW’s compliance with the resolution plan and defended their right to participate in the proceedings, citing their role as personal guarantors.

He alleged that JSW failed to inject the promised working capital and accused the company of benefitting from rising steel prices before implementing the plan.

He also contended that the CoC’s powers do not extend beyond plan approval by the NCLT and that disputes over non-compliance should be taken back to the tribunal.

The solicitor general Mehta described the former promoters as having “brought the company to dust” and called this “one of the worst cases of siphoning” he had seen.

He maintained that the CoC’s claims over EBITDA and delay interest were justified and that the body remained a legal entity until the Supreme Court’s final decision under Section 62 of the IBC.