The Supreme Court on Monday reserved its verdict on a clutch of petitions concerning JSW Steel’s ₹19,700-crore resolution plan for debt-ridden Bhushan Power and Steel Limited (BPSL), after extensive hearings involving the company, its creditors, and former promoters.
A special bench of 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.
The matter came up afresh after the CJI-led bench, on July 31, recalled its May 2 verdict which had ordered BPSL’s liquidation and annulled JSW’s resolution plan, criticising the CoC, the resolution professional, and the National Company Law Tribunal (NCLT) for “flagrant violations” of the Insolvency and Bankruptcy Code (IBC).
Key Dispute: EBITDA and Delay Interest
One of the core issues is whether the earnings before interest, tax, depreciation, and amortisation (EBITDA) generated during the resolution period should accrue to the creditors or remain with the company. The CoC has claimed ₹3,569 crore towards EBITDA and ₹2,500 crore as delay-related interest.
Kaul argued that neither the request for resolution plan (RFRP) nor the plan itself mandated sharing EBITDA with the creditors, and that JSW bid for BPSL on an “as is, where is” basis, accepting both its profits and losses. He said delays arose due to the Enforcement Directorate’s asset attachment, lifted only in December 2024.
Former Promoters’ Objections
Dhruv Mehta, for the former promoters, challenged JSW’s compliance with the resolution plan, alleging failure to infuse the promised working capital and claiming the company benefited from soaring steel prices before implementing the plan. He also argued that the CoC’s authority ends with NCLT’s approval and that any non-compliance issues should be referred back to the tribunal.
CoC’s Stand
Solicitor General Mehta accused the former promoters of having “brought the company to dust” and termed it “one of the worst cases of siphoning” he had seen. He defended the CoC’s claim over EBITDA and delay interest, maintaining that the body remains a legal entity until the Supreme Court’s final decision under Section 62 of the IBC.
