2025 INSC 621

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1808 of 2020

KALYANI TRANSCO ... APPELLANT

VERSUS

M/S.BHUSHAN POWER AND

STEEL LTD. & ORS. ... RESPONDENTS

WITH
CIVIL APPEAL NOS. 2192-2193 OF 2020

CIVIL APPEAL NO. 3784 OF 2020

CIVIL APPEAL NO. 2225 OF 2020

CIVIL APPEAL NO. 3020 OF 2020

CIVIL APPEAL NO. 668 OF 2021

CIVIL APPEAL NO. 6390 OF 2021

JUDGMENT

BELA M. TRIVEDI, J.

1.
Signature Not Verified

Digitally signed by
This batch of Appeals stems from the common impugned
RAVI ARORA
Date: 2025.05.02
20:44:53 IST
Reason: Judgment and Order dated 17.02.2020 passed by the

CIVIL APPEAL NO.1808 OF 2020 Page 1 of 105

 National Company Law Appellate Tribunal (For short
NCLAT), New Delhi in the Company Appeals filed by the
various parties.

(I) THE DETAILS AND CATEGORIES OF THE APPEALS: -

(i) Civil Appeal No. 1808 of 2020 has been filed by the
Kalyani Transco, an operational creditor of the
Corporate Debtor (For short CD) M/s. Bhushan
Power and Steel Limited (For short BPSL)
challenging the impugned Judgment and Order
dated 17.02.2020 passed by the NCLAT in
Company Appeal (AT) (Insolvency) No. 1035 of
2019.
(ii) Civil Appeal Nos. 2192-2193 of 2020 have been filed
by Mr. Sanjay Singal & Another, the erstwhile
promoters of CD challenging the impugned
Judgment and Order in Company Appeal (AT)
(Insolvency) No. 1034 of 2019 and the Company
Appeal (AT) (Insolvency) No. 957 of 2019.
(iii) Civil Appeal No. 3784 of 2020 has been filed by the
Government of Odisha & Others challenging the
impugned Judgment and Order in Company Appeal
(AT) (Insolvency) No. 1461 of 2019.
(iv) Civil Appeal No. 2225 of 2020 has been filed by the
Jaldhi Overseas Pte. Limited, an Operational

CIVIL APPEAL NO.1808 OF 2020 Page 2 of 105

 Creditor of CD challenging the impugned Judgment
and Order in Company Appeal (AT) (Insolvency) No.
1055 of 2019.
(v) Civil Appeal No. 3020 of 2020 has been filed by M/s.
Medi Carrier Private Limited, an operational creditor
of CD challenging the impugned Judgment and
Order in Company Appeal (AT) Insolvency No. 1074
of 2020.
(vi) Civil Appeal No. 668 of 2021 has been filed by the
State of Odisha (was not party before the NCLAT)
challenging the impugned Judgment and Order in
Company Appeal (AT) (Insolvency) No. 1035 of
2019.
(vii) Civil Appeal No. 6390 of 2021 has been filed by CJ
Darcl Logistics Limited, an operational creditor
challenging the impugned Judgment and Order in
Company Appeal (AT) Insolvency No. 1126 of 2019.

(II) FACTUAL BACKGROUND

2. After the enactment of the Insolvency and Bankruptcy

Code, 2016 (IBC), the Banking Regulation Act, 1949 was
amended w.e.f. 04.05.2017, to enable the RBI to issue
directions to the Indian Banks to mandatorily initiate the
Corporate Insolvency Resolution Process (for short CIRP).

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 The RBI vide its Circular dated 13.06.2017, therefore
identified 12 big accounts for resolution, infamously known
as the “dirty dozen”, which included BPSL, constituting
about 25% of total non-performing assets in the country,
for immediate admission under the IBC. The Factual
matrix of the CIRP proceedings against BPSL may be
summarized as follows: -
(i) The CIRP proceedings were triggered against BPSL
at the instance of Punjab National Bank, which filed
a Company Petition being C.A. (IB) No. 202 (PB) of
2017 before the NCLT under the provisions
contained in the IBC. The said petition was admitted
on 26.07.2017.
(ii) As per Section 15 of IBC, the Interim Resolution
Professional (IRP) invited claims on 28.07.2017
from all the stakeholders.
(iii) The IRP received various claims, out of which the
Resolution Professional admitted claims to the tune
of INR 4,72,04,51,78,073.88 (Rupees Forty-Seven
Thousand Two Hundred and Four Crores Fifty-One
Lakhs Seventy-Eight Thousand and Seventy-Three
and Eighty-Eight Paise) in respect of Financial
Creditors, and admitted claims to the tune of INR
6,21,37,61,735 (Rupees Six Hundred and Twenty-

CIVIL APPEAL NO.1808 OF 2020 Page 4 of 105

 One Crores Thirty-Seven Lakhs Sixty-One
Thousand Seven Hundred and Thirty-Five), in
respect of Operational Creditors.
(iv) The Committee of Creditors (CoC) in their first
meeting held on 01.09.2017 confirmed the
appointment of IRP as the Resolution Professional.
(v) Pursuant to the Advertisement dated 21.09.2017,
the Prospective Resolution Applicants – JSW, Tata
Steel and Liberty House submitted their respective
Resolution Plans.
(vi) Thereafter, certain litigations - applications/ appeals
came to be filed by the Liberty House and Tata
Steels before the NCLT and NCLAT, wherein certain
orders were passed, not very relevant to the issues
we are dealing with.
(vii) On account of the promulgation of IBC (Amendment)
Ordinance, 2017, on 23.11.2017, the CoC required
certain affidavits/ undertakings from the Prospective
Resolution Applicants, particularly in terms of
Section 29A.
(viii) After multiple rounds of negotiations and
deliberations, all the three Prospective Resolution
Applicants had submitted their improved/ revised

CIVIL APPEAL NO.1808 OF 2020 Page 5 of 105

 Resolution Plans within the deadline stipulated by
the NCLAT vide order dated 06.08.2018.
(ix) In the 18th Meeting held on 14.08.2018 the plans
submitted by the Liberty House, the Tata Steel and
the JSW were evaluated by the CoC, as per the
evaluation matrix formulated by it, and the JSW was
found to have scored the highest in terms of the said
evaluation matrix. However, the CoC did not declare
H-1 and H-2.
(x) It appears that pursuant to the further negotiations
between the Core Committee comprising of small
group of lenders, JSW submitted the Consolidated
Resolution Plan on 03.10.2018. The said
Consolidated Plan was circulated by the Resolution
Professional to the members of CoC on 05.10.2018
and uploaded in the Virtual Data room.
(xi) Thereafter, the Resolution Professional having
received a requisition from some of the Banks, he
called for a meeting of CoC on 10.10.2018 for
consideration and approval of Consolidated
Resolution Plan.
(xii) Pursuant to the discussion held in the meeting on
10.10.2018, JSW submitted a letter dated
10.10.2018 (Addendum Letter) amending and

CIVIL APPEAL NO.1808 OF 2020 Page 6 of 105

 clarifying certain terms of the Consolidated
Resolution Plan, in view of the Amendments made
in the CIRP Regulations, vide Insolvency and
Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Fourth Amendment
Regulations, 2018.
(xiii) According to the Resolution Professional, the
consolidated Plan as amended by the Addendum
letter, was circulated to the members of the CoC,
and the same was considered by the CoC in its 19th
Meeting held on 10.10.2018.
(xiv) Pursuant to the discussion in 19th Meeting, the said
Consolidated Plan with Addendum Letter for
approval was put for e-voting between 15.10.2015,
5 PM and 16.10.2015, 5 PM on Central Depository
Services (India) Limited.
(xv) According to the Resolution Professional, the e-
voting resulted in the approval of the Consolidated
Resolution Plan, as amended by Addendum Letter
of JSW by the requisite majority of CoC.
(xvi) The Resolution Professional thereafter filed a
Company Application being no. 254 (PB)/2019 on
14.02.2019 under Section 30(6) and 31(1) of the
IBC, read with Regulation 39(4) of the Insolvency

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 and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons)
Regulation, 2016, (hereinafter referred to as the
Regulations, 2016), with a principal prayer of
accepting the RP approved by the CoC, submitted
by the JSW.
(xvii) Pending the said proceedings, the CBI on
05.04.2019 registered an FIR bearing No.
RCBD1/2019/E/2002 against BPSL, its Directors
and others under Section 120B read with Sections
420, 468, 471, 477A IBC and Section 13(2) read with
Section 13(1)(d) of the Prevention of Corruption Act.
On the basis of the said FIR, the Directorate of
Enforcement, New Delhi, registered the case being
ECIR/DLZO-I/02/2019 on 25.04.2019 for the
offences under the Prevention of Money Laundering
Act, 2002 (PMLA).
(xviii) There were other many Company Applications filed
by the erstwhile Directors and by some operational
Creditors before the NCLT in the said Company
Petition.
(xix) The NCLT vide the common Judgment and Order
dated 05.09.2019 dismissed the Company
Applications filed by the erstwhile Directors, and

CIVIL APPEAL NO.1808 OF 2020 Page 8 of 105

 approved the Resolution Plan of JSW, subject to the
condition nos. (a) to (k) contained in Para-128 of the
said Judgment. The said Para-128 is reproduced as
under:
“128. As a sequel of the above discussion, CA
No. 254(PB)/2019 is allowed and the resolution
plan of JSW-H1 Resolution Plan Applicant is
accepted. The objections raised by the Ex-
Directors cum Promoters of the Corporate
Debtor and Operational Creditors are hereby
over-ruled. However, the acceptance and
approval of the resolution plan shall be subject
to the following;
a) The amount due to the operational creditors
under the resolution plan must be paid in
accordance with the amended Section 30 (2) of
the Code as the amendment expressly provides
that it would be applicable to all applications
pending for approval of the resolution plan like
the one in hand.
b) C.A. No. 327(PB)/2019 with a prayer for
placing the settlement proposal dated
20.02.2019 before the CoC is hereby rejected.
c) CA No. 286(PB)/2019 filed by the erstwhile
directors Mr. Sanjay Singhal and Mrs. Aarti
Singhal seeking copies of the resolution plan is
dismissed with a cost of Rs. 1 /- lac to be paid
personally by Mr. Sanjay Singal and Ms. Aarti
Singal in equal share.
d) The resolution plan would be binding on the
corporate debtor, its creditors, guarantors,
members, employees and other stakeholders.
The reduction of share capital of the corporate
debtor as contemplated by the resolution plan
would take effect without any further deed or act
on the part of the corporate debtor and/ or its
constitutes.
e) We also approve the appointment of
Monitoring Agency from the date of this order

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 until the closing date. Accordingly, the CoC and
the RP would continue as Monitoring Agency.
f) The power of the Board of Directors of the
Corporate Debtor shall remain suspended until
the closing date.
g) Various reliefs sought from the statutory
authorities under the Income Tax Act, 1961,
Ministry of Corporate Affairs, Department of
Registration and Stamps, Reserve Bank of India
and others are also disposed of. We do not feel
persuaded to accept the prayer made in the
resolution plan yet the resolution plan applicant
may file appropriate applications before the
competent authorities which would be
considered in accordance with law because it
would not be competent for the Adjudicating
Authority-NCLT to enter into any such area for
granting relaxation, concession or waiver which
is wholly within the domain of competent
authorities.
h) It is needless to clarify that Section 30(2)(f) of
the Code mandates that the Resolution plan
should not be against any provisions of the
existing law. The resolution applicant, therefore,
shall adhere to all the applicable laws for the
time being in force.
i) The criminal proceedings initiated against the
erstwhile Members of the Board of Directors and
others shall not effect the JSW-H1 Resolution
Plan Applicant or the implementation of the
resolution plan by the Monitoring Agency
comprising of CoC and RP. We leave it open to
the Members of the CoC to file appropriate
applications if criminal proceedings result in
recovery of money which has been siphoned of
or on account of tainted transactions or
fabrication as contemplated under the various
provisions of the Code or any other law. Those
applications shall be considered in accordance
with the prevalent law.
j) The RP is directed to redistribute the profits
earned by running the Corporate Debtor during

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 the Corporate Insolvency Resolution Process in
accordance with the judgment of the Hon'ble
NCLAT rendered in the case of Standard
Chartered Bank v. Satish Kumar Gupta, R.P. of
Essar Steel Ltd. & Ors., Company Appeal (AT)
(Ins.) No. 242 of 2019 decided on 04.07.2019
and the action to be taken by the RP is evident
from the reading of para 211 of the said
judgment .
k) The cases in which the Adjudicating Authority
or the Appellate Authority could not decide the
claim on merit, all such Applicants may raise the
issue before an appropriate forum in terms of
Section 60(6) of the Code. The other 'Financial
Creditors/Operational Creditors' would not be
entitled any remedy under Section 60 (6) of the
Code.”

(xx) The Successful Resolution Applicant-JSW,

challenged some of the conditions mentioned in said
order passed by NCLT approving its Resolution
Plan, by filing the Appeal being Company Appeal
No. 957 of 2019, under Section 61 of IBC.
(xxi) After the approval of the plan by the NCLT as
aforesaid, the Directorate of Enforcement of Central
Government (ED), passed an order (PAO) on
10.10.2019 provisionally attaching the assets of the
CD-BPSL under Section 5 of the Prevention of
Money Laundering Act, 2002 (PMLA).
(xxii) The said PAO having been challenged by JSW
before NCLAT, in the Company Appeal No. 957 of
2019, the NCLAT stayed the PAO as well as the

CIVIL APPEAL NO.1808 OF 2020 Page 11 of 105

 Resolution Plan so far it related to the payment of
creditors, vide the Order dated 14.10.2019.
(xxiii) The CoC also challenged the PAO in Supreme Court
by filing SLP (C) Nos. 29327-29328 of 2019, wherein
this Court vide the Order dated 18.12.2019 stayed
the PAO dated 10.10.2019.
(xxiv) Several Company Appeals also came to be filed by
various parties before the NCLAT challenging the
order dated 05.09.2019 passed by NCLT.
(xxv) The NCLAT vide the impugned Judgment and
Order dated 17.02.2020 approved the judgment and
order dated 05.09.2020 passed by the NCLT,
subject to the modifications/clarifications made by it
in its impugned judgment. The NCLAT, thereby
allowed the Company Appeal filed by the JSW, and
dismissed the Company Appeals filed by ‘Mr. Sanjay
Singhal,’ ‘Kalyani Transco,’ ‘Jaldhi Overseas,’ ‘Medi
Carrier,’ ‘CJ Darcl Logistics’ and ‘State of Odisha &
Others.’
(xxvi) The relevant conditions imposed by the NCLT and
modified by the NCLAT may be glanced in a
tabulated form as under:
ORIGINAL CONDITIONS MODIFIED CONDITIONS
BY NCLT BY NCLAT
E- We also approve the 1. Reference to the
appointment of Monitoring 'Monitoring Agency' in the

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 Agency from the date of this impugned order may be
order until the closing date. read as a reference to the
Accordingly, the CoC and Steering Committee and
the RP would continue as the Monitoring
Monitoring Agency. Professional as set out in
Resolution plan and that
the implementation of the
Resolution Plan until the
Effective Date would be by
the 'Reconstituted Board',
also in terms of the
Resolution Plan.
2. Actions taken by the
'Monitoring Agency' as
constituted in the
impugned order in interim
to be deemed to have been
valid, without requiring any
further action/ratification
from the 'Reconstituted
Board'
F- The power of the Board 1. Board of Directors shall
of Directors of the remain suspended until the
Corporate Debtor shall closing date only to ensure
remain suspended until the that the previous
closing date. suspended board of
directors does not stand
revived on account of the
completion of the CIR
Process, and does not
interfere with the interim
management mechanism
in the Resolution Plan.
G-Various reliefs sought 1. All penalties, interest,
from the statutory delayed payment charges,
authorities under the any other liabilities for any
Income Tax Act, 1961, non-compliance with
Ministry of Corporate statutory obligations
Affairs, Department of including taxes, including
Registration and Stamps, delays in filing returns or
Reserve Bank of India and payment of tax dues,
others are also disposed of. against the Company shall

CIVIL APPEAL NO.1808 OF 2020 Page 13 of 105

 We do not feel persuaded to stand settled in accordance
accept the prayer made in with the provisions of this
the resolution plan yet the plan as approved by NCLT.
resolution plan applicant
may file appropriate
applications before the
competent authorities
which would be considered
in accordance with law
because it would not be
competent for the
Adjudicating Authority-
NCLT to enter into any such
area for granting relaxation,
concession or waiver which
is wholly within the domain
of competent authorities.
I The criminal proceedings we set aside the condition
initiated against the stipulated in second part of
erstwhile Members of the para 128(i) of the impugned
Board of Directors and order, regarding monies
others shall not affect the recovered from tainted and
JSW-Hl Resolution Plan other such transactions, as
Applicant or the being contrary to the agreed
implementation of the position in terms of para 13
resolution plan by the of the Addendum Letter,
Monitoring Agency which forms a part of the
comprising of CoC and RP. Resolution Plan.
We leave it open to the
Members of the CoC to file
appropriate applications if
criminal proceedings result
in recovery of money which
has been siphoned off or on
account of tainted
transactions or fabrication
as contemplated under the
various provisions of the
Code or any other law.
Those applications shall be
considered in accordance
with the prevalent law.

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 J- The RP is directed to The Monitoring Committee
redistribute the profits with the help of the
earned by running the ‘Resolution Professional’ will
Corporate Debtor during now go through the RPF
the Corporate Insolvency issued in terms of Section 25
Resolution Process in of IBC and as consented to
accordance with the by the Resolution Applicant
judgment of the Hon'ble JSW will make distribution of
NCLAT rendered in the profit accordingly.
case of Standard Chartered
Bank v. Satish Kumar
Gupta, R.P. of Essar Steel
Ltd. & Ors., Company
Appeal (AT) (Ins.) No. 242
of 2019 decided on
04.07.2019 and the action
to be taken by the RP is
evident from the reading of
para 211 of the said
judgment
K- The cases in which the This condition requires
Adjudicating Authority. or consideration in view of
the Appellate Authority decision of the Hon'ble
could not decide the claim Supreme Court in
on merit, all such Applicants "Committee of Creditors of
may raise the issue before Essar Steel India Limited v.
an appropriate forum in Satish Kumar Gupta & Ors. -
terms of Section 60(6) of 2019 SCC OnLine SC 1478.
the Code. The other This condition being against
Financial the provision of law is set
Creditors/Operational aside as The Appellant
Creditors' ·would not be being the 'Successful
entitled any remedy under Resolution Applicant' cannot
Section 60 (6) of the Code. be asked to face with
undecided claims after the
Resolution Plan' submitted
by him and accepted by the
'Committee of Creditors' as
this would amount to a hydra
head popping up which
would throw into uncertainty
amounts payable by a

CIVIL APPEAL NO.1808 OF 2020 Page 15 of 105

 prospective resolution
applicant who successfully
takes over the business of
the 'Corporate Debtor', as
held by the Hon'ble Supreme
Court.

3. Being aggrieved by the said impugned Judgment and

Order of NCLAT, these appeals have been filed by the
Appellants as stated hereinabove.
4. This Court while admitting the Civil Appeal No. 1808/2020
filed by Kalyani Transco, and other appeals filed by the
other parties, had vide order dated 06.03.2020, recorded
the statement of learned Senior Advocate Dr. A.M. Singhvi
appearing for the CoC as under: -
“UPON hearing the counsel the court made the
following

ORDER

The appeals are admitted.

Dr. A.M. Singhvi, learned senior counsel appearing for
the Committee of Creditors states that in case he
receives money, he will return the said amount within
two months, if the appeal succeeds.
List all the matters together on 15.04.2020.”

5. It appears that JSW, which was Respondent No. 2 in the

SLP (C) No. 29327-29328 of 2019 filed by the CoC, filed
an Application being I.A. No. 47947/2020 on 20.03.2020

CIVIL APPEAL NO.1808 OF 2020 Page 16 of 105

 seeking clarification of the order dated 06.03.2020 to the
extent that JSW was not obligated to implement the
Resolution Plan during pendency of the SLPs filed by the
CoC, Kalyani Transco, Sanjay Singal and others against
the Judgment dated 17.02.2020 passed by NCLAT. The
said I.A. No. 47947/2020 was resisted by the CoC by filing
a detailed reply contending inter alia that JSW was
attempting to seek a stay on the implementation of the
plan under the garb of clarification of the order dated
06.03.2020. The CoC in the said reply made some serious
allegations of misuse of process of court against JSW and
sought direction against JSW to implement the plan as per
its statutory obligations under the IBC.
6. It further appears that an Application being No. 42114 of
2021 dated 01.06.2024 came to be filed in SLP (C) Nos.
29327-29328/ 2019 by the CoC for placing on record
certain additional facts. The said Application was filed
along with an affidavit filed by one Mr. Satishan, Assistant
General Manager of SBI, under the purported authority
granted to him vide the 13th Meeting of CoC of BPSL dated
29.05.2018. In the said Application, the Applicant after
quoting the aforesaid Order dated 06.03.2020, further
stated in Para No.5 to 10 as under: -

CIVIL APPEAL NO.1808 OF 2020 Page 17 of 105

 “5. Subsequently, during the hearing on June 10,
2020, on JSW's Application seeking clarification, this
Hon'ble Court even categorically observed that there is
no stay against the implementation of the Resolution
Plan.
6. That while the Connected Appeals are pending
adjudication, certain material developments have
occurred in the insolvency of the Corporate Debtor
which are required to be brought to the notice of this
Hon'ble Court:
(a) Pursuant to the afore-stated March 06, 2020
order of this Hon'ble Court, the Petitioner CoC and
JSW engaged in regular discussions and
deliberations on the terms of the resolution plan and
its unconditional nature requiring immediate
implementation. All these correspondences have
been brought on record earlier and are not being
repeated herein for the sake of brevity;
(b) Vide letter dated February 26, 2021, JSW has
expressed its desire to implement the Resolution
Plan in furtherance of the Order dated March 6,
2020 of this Hon’ble Court and offered to deposit
the amount of Rs. 19,350,00,00,000 (Rupees
Nineteen Thousand Three Hundred and Fifty
Crores) ("Upfront Payment Amount" as defined in
the Resolution Plan) within 30 days of acceptance
of this letter in writing by the Financial Creditors, in
an escrow account.
(c) This letter has been accepted by CoC with
97.25% of the lenders (by value) confirming their
acceptance (and no dissent), and the Resolution
Plan is currently proposed to be implemented in
accordance with the same.
(d) It is submitted that the said deposit of the
Upfront Payment Amount in the escrow account by
JS Wand implementation of the Resolution Plan is

CIVIL APPEAL NO.1808 OF 2020 Page 18 of 105

 in consonance of this Hon'ble Court order dated
March 06, 2020, and would, in any manner, be
subject to the order of this Hon’ble Court inasmuch
as:
(i) In the event of any order of the Hon'ble
Supreme Court allowing the appeals filed
against the Hon'ble Appellate Tribunal judgment
dated February 17, 2020 leading to setting aside
of the approved Resolution Plan for any reason
whatsoever, or denying the benefit under
section 32A of the Code to the Corporate
Debtor/ Resolution Applicant which would result
in ED's claim against Corporate Debtor not
being set aside or which would result in the
attachment of the assets of the Corporate
Debtor by the ED continuing, the Upfront
Payment Amount shall be refunded by the CoC
to the Resolution Applicant - JSW within the
time period provided for in the March 06, 2020
Order, and that in case of such refund, the
ownership, control and possession of Corporate
Debtor will be handed over back by JSW to the
Financial Creditors. The aforesaid is being
further specified in an escrow agreement
proposed to be signed inter alia between the
financial creditor and the Resolution Applicant.
(ii) In the event this Hon'ble Court in the matter
grants the benefit under section 32A of the Code
to the Corporate Debtor/ Resolution Applicant,
which would result in ED's claim against
Corporate Debtor being set aside and which
would result in the attachment of the assets of
the Corporate Debtor by the ED being set aside,
the CoC will have no obligation to refund the
Upfront Payment Amount to the Resolution
Applicant.

CIVIL APPEAL NO.1808 OF 2020 Page 19 of 105

 (iii) The implementation of the Resolution Plan
would be without prejudice to the rights, claims,
entitlements and contentions of the CoC as well
as the Resolution Applicant, including in the
matters pending before this Hon'ble Court.

7. That, thus, the implementation of the Resolution

Plan is not prejudicial to any of the stakeholders of the
Corporate Debtor and is fully subject to the
proceedings before this Hon'ble Court.
8. It is submitted that the Resolution Plan of JSW was
approved by the CoC in October 2018, by the Hon'ble
Adjudicating Authority on September 5, 2019, and
subsequently even by the Hon'ble Appellate Tribunal
on February 17, 2020. Hence, it is imperative that the
Resolution Plan be put to implementation without any
further delay especially when this Hon'ble Court has
observed during the hearing on June 10, 2020, on the
Application of JSW, that there is no stay against
implementation of the Resolution Plan.

9. It is submitted that the pursuant to the non-

implementation of the Resolution Plan, the Corporate
Debtor on and from the approval of the Resolution Plan
by the Hon'ble NCLAT on February 17, 2020 has been
operated and managed by a Monitoring Professional
(the erstwhile Resolution Professional), who is
supported by an O&M Agency which conducts the
business operations of the Company, as per the
Resolution Plan. An interim board of directors with a
limited role has also been appointed by the steering
committee of lenders as per the Resolution Plan.
However, the provisions of the Resolution Plan in this
respect were intended to operate for only a limited
period of 30 days from the approval of the Resolution
Plan by the relevant Tribunal after which the Resolution
Applicant was supposed to take-over the Corporate

CIVIL APPEAL NO.1808 OF 2020 Page 20 of 105

 Debtor. The continuance of this ad-hoc mechanism of
interim management for more than an entire year,
while being in accordance with the Resolution Plan, is
not in the interest of all stakeholders given the size and
business of the Corporate Debtor. It is submitted
therefore that it is in the interest of all stakeholders that
the Resolution Plan is implemented in full at the
earliest.

10. The Petitioner craves leave of this Hon'ble Court to

refer to and rely on the averments, contents and
documents annexed to the said SLP and the
subsequent filings by the Petitioner thereunder as an
integral part and parcel of the present application and
the contents are not being repeated herein for the sake
of brevity.”

7. The Civil Appeal Nos. 14503-14504 of 2024 arising out of

SLP (C) Nos. 29327-29328 of 2019 filed by the Committee
of Creditors against ED and Civil Appeal No. 3362 of 2020
filed by the ED against the JSW and Others, came to be
disposed of in terms of the Order dated 11.12.2024, which
is reproduced hereunder:
“1. The Civil Appeals arising out of SLP(C) Nos.
29327-29328/2019 have been filed by the Committee
of Creditors against the Directorate of Enforcement
and Others challenging the impugned order dated
10.10.2019 passed by the Directorate of Enforcement
(hereinafter referred to as the E.D.) in exercise of the
powers conferred under the Second proviso to sub-
section(1) of Section 5 of the Prevention of Money
Laundering Act 2002 (hereinafter referred to as the
PMLA), ordering provisional attachment of the
properties as detailed in the Table mentioned therein,

CIVIL APPEAL NO.1808 OF 2020 Page 21 of 105

 of the Corporate Debtor (Bhushan Power and Steel
Ltd.), being the proceeds of crime as defined under
Section 2(1)(u) of the PMLA, and challenging the
impugned judgment dated 14.10.2019 passed by the
National Company Law Appellate Tribunal, New Delhi
(hereinafter referred to as the NCLAT) in Company
Appeal (AT)(Insolvency) No. 957/2019, staying the
said order dated 10.10.2019 passed by the E.D. The
Civil Appeal No. 3362 of 2020 has been filed by the
E.D. against JSW Steel Ltd. and Others, challenging
the impugned judgment dated 17.02.2020 passed by
the NCLAT in the said Company Appeal
(AT)(Insolvency) No.957/2019, approving the
Resolution Plan submitted by the successful
Resolution Applicant JSW Steel Ltd. with
modification/clarification as mentioned therein.
2. These Civil Appeals were tagged along with the Civil
Appeal No.1808/2020 filed by Kalyani Transco against
Bhushan Power and Steel Ltd. and Others along with
the other Civil Appeals.
3. The issue involved in the instant Appeals pertained
to the jurisdiction of the E.D. to attach the properties of
the Corporate Debtor, which was undergoing
Corporate Insolvency Resolution Process, particularly
in the light of Section 32A of the Insolvency and
Bankruptcy Code, 2016 (IBC).
4. Today, the learned counsel Mr. Zoheb Hussain and
learned S.G. Mr. Tushar Mehta appearing for the E.D.
have submitted the Affidavit dated 11.12.2022 of Mr.
Dipin Goel, Deputy Director, Directorate of
Enforcement, New Delhi, and have prayed to dispose
of these Appeals in the light of the said Affidavit. Mr.
Zoheb Hussain also took the Court to the provisions
contained in the sub-section(2) of Section 32A of the
IBC and in sub-section(8) of Section 8 of the PMLA
read with Rule 3A of the Prevention of Money
Laundering(Restoration of Property) Rules, 2016
(hereinafter referred to as the said Rules) to submit that
the NCLT had approved the Resolution Plan vide the
order dated 05.09.2019 which was under challenge
before the NCLAT in the Appeals filed by various

CIVIL APPEAL NO.1808 OF 2020 Page 22 of 105

 parties, and in the meantime the competent authority
of the PMLA vide the order dated 10.10.2019 had
provisionally attached the properties of the Corporate
Debtor. He further submitted that Section 32A came to
be inserted in the IBC with effect from 28.12.2019,
which did not have the retrospective effect, and hence,
in view of the peculiar facts and circumstances of the
case and without prejudice to the rights and
contentions of the E.D. with regard to the investigation
of the case registered against the accused-Promoters
of the Corporate Debtor-Bhushan Power and Steel Ltd.
and Others, the successful Resolution Applicant be
permitted to take control of the attached properties
treating the same as the restitution under Section 8(8)
of the PMLA read with Rule 3A of the said Rules.
5. The learned senior counsel Mr. Abhishek Manu
Singhvi appearing for the CoC and learned senior
advocate Mr. Neeraj Kishan Kaul appearing for the
successful Resolution Applicant have also stated that
they have no objection if these Appeals are disposed
of as prayed for in the light of the said Affidavit filed on
behalf of the E.D.
6. In view of the above submissions made by the
learned counsel for the E.D. and the learned counsel
for the CoC and for the successful Resolution Applicant
JSW, following order is passed without expressing any
opinion on the merits of the Appeals and without
prejudice to the rights and contentions of the respective
parties in the connected Appeals and other
proceedings, including the right of the E.D. to
investigate into the cases registered against the
accused-Promoters of the Corporate Debtor, under the
PMLA.
ORDER
(i) The Appellant-E.D. is directed to handover and the
Respondent successful Resolution Applicant JSW is
directed to take over the control of the properties of
Corporate Debtor-Bhushan Power and Steel Ltd.,
provisionally attached vide the order dated 10.10.2019

CIVIL APPEAL NO.1808 OF 2020 Page 23 of 105

 passed by the E.D., immediately in view of Section 8(8)
of the PMLA read with Rule 3A of the said Rules.
(ii) It is clarified that this order is passed with the
consensus of the learned counsels appearing for the
concerned parties, considering the peculiar facts and
circumstances of the cases, more particularly the fact
that the order of provisional attachment was passed by
the E.D. after the Adjudicating Authority i.e., NCLT had
approved the Resolution Plan submitted by the
successful Resolution Applicant.
(iii) It is further clarified that the Court has not
expressed any opinion on the interpretation of Section
32A (2) of IBC or on the powers of the E.D. to attach
the property of the Corporate Debtor which is
undergoing the Corporate Insolvency Resolution
Process, or on any other legal issue involved in the
other connected Appeals which are pending for
consideration before this Court.
7. All the three Appeals stand disposed of in terms of
the aforesaid order.
8. Pending application(s), if any, shall also disposed
of.”

(III) PRELIMINARY OBJECTIONS

8. The learned Senior Advocate Mr. Neeraj Kishan Kaul

appearing for the SRA/JSW and the learned Senior
Advocate Mr. Abhishek Manu Singhvi appearing for the
CoC at the outset had raised the preliminary objections
with regard to the maintainability of the Appeals filed at the
instance of the Appellants who are the Ex-Promoters,
Operational Creditors and the Government Authorities
under Section 62 of IBC. According to them, an Appeal
under Section 62 could be filed only by a “person

CIVIL APPEAL NO.1808 OF 2020 Page 24 of 105

 aggrieved” against an order passed by the NCLAT, and
that too on a question of law arising out of such order. They
further submitted that the Ex-Promoters have raised the
issues in their Appeals with regard to implementation of
the Resolution Plan which issues were not raised even
before the NCLAT, and even otherwise the said issues are
beyond the scope of Section 62. According to them, in any
case the SRA-JSW has already implemented the
Resolution Plan successfully by making payments to the
Financial Creditors on 26.03.2021 and by making
payments to the Operational Creditors in March 2022.
They also submitted that the Appellant Kalyani Transco
and other Operational Creditors could no longer be said to
be the “person aggrieved,” once they have now accepted
their payments under the said Resolution Plan. As regards
the Appeals filed by the Appellant State of Odisha, it was
sought to be submitted by them that the State of Odisha
did not file its claim with respect to Entry tax dues before
the Resolution Professional, did not approach the NCLT
and had filed its Appeal against the Plan Approval Order
before the NCLAT. Similarly, the State of Odisha had failed
to raise its claim with regard to the Electricity dues before
the Resolution Professional, did not file any proceeding
before NCLT and NCLAT, and for the first time has filed

CIVIL APPEAL NO.1808 OF 2020 Page 25 of 105

 the present Appeal before this Court, which may not be
entertained.
9. Apropos the preliminary objections raised by the learned
Senior Advocates appearing for the respondents-JSW and
CoC, it may be noted that the issue of maintainability of
the Appeals has to be decided by the Court considering
the position of the parties at the time of the institution of
the Appeals, as to whether the Appellants could be said to
be the “persons aggrieved" as contemplated in Section 62
of the IBC. In our opinion, the recent decision of Three-
judge Bench in case of Glas Trust Company LLC Vs.
Byju Raveendran and Others1 clinches the issue as to
who could be said to be an “aggrieved person” for filing an
Appeal before the Supreme Court and before the NCLAT.
It has been held: -
“75. The provision stipulates that “any person” who is
aggrieved by the order of the National Company Law
Appellate Tribunal may file an appeal before the
Supreme Court within the prescribed limitation period.
Similar language is used in section 61 of the Insolvency
and Bankruptcy Code, which provides for appeals to
the National Company Law Appellate Tribunal from
orders of the National Company Law Tribunal. The use
of the phrase “any person aggrieved” indicates that
there is no rigid locus requirement to institute an appeal
challenging an order of the National Company Law
Tribunal, before the National Company Law Appellate
Tribunal or an order of the National Company Law
Appellate Tribunal, before this court. Any person who

1 2024 SCC OnLine SC 3032

CIVIL APPEAL NO.1808 OF 2020 Page 26 of 105

 is aggrieved by the order may institute an appeal, and
nothing in the provision restricts the phrase to only the
applicant creditor and the corporate debtor. As noted
above, once the corporate insolvency resolution
process is initiated, the proceedings are no longer
restricted to the individual applicant creditor and the
corporate debtor but rather become collective
proceedings (in rem), where all creditors, such as the
appellant, are necessary stakeholders…..”

10. Thus, the use of the phrase “any person aggrieved”

indicates that there is no rigid locus requirement to institute
an Appeal challenging the order of NCLT before the
NCLAT, or an order of NCLAT before this Court. Any
person who is aggrieved by the order may institute an
Appeal. Once the Corporate Insolvency Resolution
Process is initiated, the proceedings are no longer
restricted to any individual Applicant Creditor or to the
Corporate Debtor, but rather they become collective
proceedings in rem, where all the creditors and the Ex-
Directors would be necessary stakeholders. Therefore, the
Appellants who are the operational creditors, and the
erstwhile Promoters, being important stakeholders, and
whose Company Appeals have been dismissed by the
NCLAT vide the impugned judgment, would certainly be
the persons aggrieved entitled to file Appeals before this
Court under Section 62 of the IBC. Moreover, they have
also raised number of questions of law in the instant

CIVIL APPEAL NO.1808 OF 2020 Page 27 of 105

 appeals, which although will be considered in the later part
of this judgment, nonetheless, they being the persons
aggrieved, the Appeals at their instance are certainly
maintainable.
11. This is also most appropriate juncture to deal with the
submissions made by the learned Advocates appearing
for the Appellants in these Appeals with regard to the
maintainability of the Company Appeal No.957 of 2019
filed by JSW before the NCLAT challenging some of the
conditions imposed by the NCLT in the order dated
05.09.2019 while approving the Resolution Plan of JSW.
According to them, the said Company Appeal of JSW was
not maintainable, as none of the grounds mentioned in
Section 61(3) of IBC existed. Since the Resolution Plan of
JSW was approved, JSW could not be said to be the
‘person aggrieved’ for filing the Appeal under Section 61,
and if it was against the order of NCLT approving the Plan,
the grounds specified in sub-section (3) must exist.
12. In order to appreciate the said submissions, the relevant
part of Section 61 under which the respondent JSW had
filed the Company Appeal before the NCLAT, is
reproduced for ready reference:
“61. Appeals and Appellate Authority.
(1) Notwithstanding anything to the contrary contained
under the Companies Act 2013 (18 of 2013), any

CIVIL APPEAL NO.1808 OF 2020 Page 28 of 105

 person aggrieved by the order of the Adjudicating
Authority under this part may prefer an appeal to the
National Company Law Appellate Tribunal.
(2)…………………
(3) An appeal against an order approving a resolution
plan under section 31 may be filed on the following
grounds, namely: —
(i) the approved resolution plan is in contravention
of the provisions of any law for the time being in
force;
(ii) there has been material irregularity in exercise
of the powers by the resolution professional during
the corporate insolvency resolution period;
(iii) the debts owed to operational creditors of the
corporate debtor have not been provided for in the
resolution plan in the manner specified by the
Board;
(iv) the insolvency resolution process costs have
not been provided for repayment in priority to all
other debts; or
(v) the resolution plan does not comply with any
other criteria specified by the Board.”

13. This Court in K. Sashidhar Vs. Indian Overseas Bank

and Others2, while considering the jurisdiction of NCLAT
as an Appellate Authority under Section 61 held as under:
“57. On a bare reading of the provisions of the I&B
Code, it would appear that the remedy of appeal under
Section 61(1) is against an “order passed by the
adjudicating authority (NCLT)”, which we will assume
may also pertain to recording of the fact that the
proposed resolution plan has been rejected or not
approved by a vote of not less than 75% of voting share
of the financial creditors. Indubitably, the remedy of
appeal including the width of jurisdiction of the
appellate authority and the grounds of appeal, is a
creature of statute. The provisions investing jurisdiction

2 (2019) 12 SCC 150

CIVIL APPEAL NO.1808 OF 2020 Page 29 of 105

 and authority in NCLT or NCLAT as noticed earlier,
have not made the commercial decision exercised by
CoC of not approving the resolution plan or rejecting
the same, justiciable. This position is reinforced from
the limited grounds specified for instituting an appeal
that too against an order “approving a resolution plan”
under Section 31. First, that the approved resolution
plan is in contravention of the provisions of any law for
the time being in force. Second, there has been
material irregularity in exercise of powers “by the
resolution professional” during the corporate
insolvency resolution period. Third, the debts owed to
operational creditors have not been provided for in the
resolution plan in the prescribed manner. Fourth, the
insolvency resolution plan costs have not been
provided for repayment in priority to all other debts.
Fifth, the resolution plan does not comply with any
other criteria specified by the Board. Significantly, the
matters or grounds—be it under Section 30(2) or under
Section 61(3) of the I&B Code—are regarding testing
the validity of the “approved” resolution plan by CoC;
and not for approving the resolution plan which has
been disapproved or deemed to have been rejected by
CoC in exercise of its business decision.”

14. In the instant case, indubitably, the NCLT vide the order
dated 05.09.2019 had allowed the Application of the
Resolution Professional, seeking approval of the
Resolution Plan of JSW as approved by the CoC. Hence,
JSW as such, could not be said to be the “person
aggrieved” by the order of NCLT approving the Resolution
Plan of JSW itself. It seems that JSW was aggrieved by
some of the conditions imposed by the NCLT while
approving its plan, however, for filing such an Appeal
under Section 61, the grounds specified in sub-section (3)

CIVIL APPEAL NO.1808 OF 2020 Page 30 of 105

 thereof must exist. As deducible from the bare reading of
sub-section (3) of Section 61, and as held by this Court in
Sashidhar (supra) and many other cases, an Appeal
against an order approving Resolution Plan under Section
31 could be filed only on the grounds mentioned therein
namely (i) if the approved plan is in contravention with the
provisions of any law for the time being in force; (ii) there
has been material irregularity in exercise of the powers by
the Resolution Professional during the corporate
insolvency resolution period; (iii) the debts owed to
operational creditors of the Corporate Debtor have not
been provided for in the Resolution Plan in the manner
specified by the Board; (iv) the insolvency resolution
process costs have not been provided for repayment in
priority to all other debts; or (v) the Resolution Plan does
not comply with any other criteria specified by the Board.
15. In the Appeal being the Company Appeal No. 957 of 2019
filed by the JSW under Section 61 before the NCLAT,
none of the grounds stated in the sub-section (3) of
Section 61 were raised, as did not exist. When the
Resolution Plan of JSW was approved by the Resolution
Professional, it was binding to all the stakeholders
including the SRA/JSW as per Section 31(1), and the
respondent JSW could not have filed the Appeal before

CIVIL APPEAL NO.1808 OF 2020 Page 31 of 105

 the NCLAT, when none of the grounds stated in sub-
section (3) existed. Interestingly, the NCLAT vide the
impugned judgment dated 17.02.2020, not only
entertained but also allowed the said Appeal of JSW which
was not legally maintainable, modified the conditions
which were not suitable to JSW, and dismissed all the
other Appeals filed by the Operational Creditors, the Ex-
Promoters and the State of Odisha.
16. Further, it is also pertinent to note that the NCLAT also
gave certain directions in Para 147 of the impugned
judgment, with regard to an issue, which was neither the
subject matter before the NCLT in the Application filed by
the Resolution Professional seeking approval of the plan,
nor the subject matter of the Company Appeal filed by the
JSW before the NCLAT. The said Para 147 of the
judgment of NCLAT reads as under:
“147. Whether 'Bhushan Power & Steel Limited'-
('Corporate Debtor') has 25.6% shareholding in 'Nova
Iron Steel' is a question of fact. However, if there is any
such share of 'Bhushan Power & Steel Limited'-
('Corporate Debtor') in 'Nova Iron Steel', after approval
of the plan and on acquisition of 'Bhushan Power &
Steel Limited' by 'JSW Steel Limited', we hold:
(a) The Company on approval of the 'Resolution Plan'
stand declassified as a promoter/ part of promoter
group of any company or entity, including any
subsidiaries or joint ventures or Associate Companies
in which the 'Corporate Debtor' has made an
investment including 'Nova Iron Steel' and shall not be
required to follow any separate procedure for

CIVIL APPEAL NO.1808 OF 2020 Page 32 of 105

 reclassification of the Company as 'public
shareholders' of such companies.
(b) If the 'Corporate Debtor' has any right over
'subsidiary companies', 'associate companies', 'joint
venture companies' of the 'Corporate Debtor', once
'Successful Resolution Applicant' ('JSW Steel Limited')
takes over the 'Corporate Debtor', it will be open to the
'Corporate Debtor' to decide whether it will continue
with such right of 'subsidiary companies', 'associate
companies', joint venture companies' or any other
companies in which 'Corporate Debtor' has share.
(c) It is further ordered that the company on approval
of the 'Resolution Plan' shall stand declassified as
promoter/ part of promoter/ group of promoter of any
company or entity, including any 'subsidiaries
companies', 'associate companies', joint venture
companies' including 'Nova Iron Steel' in which
'Corporate Debtor' has made an investment and it is
not required to follow any separate procedure for
reclassification of the company as "shareholders of
such companies".

17. We fail to understand as to how the directions such as

declassifying the Corporate Debtor company as a
promoter of any other company or entity etc., could have
been given by the NCLAT in the Appeal filed by the JSW
under Section 61, which was filed challenging only the
conditions imposed by the NCLT while approving the
Resolution plan of JSW under Section 31.
18. We are also stunned by the observations made and
findings recorded by the NCLAT in the paragraphs 51 to
57 of the impugned judgment, whereby the NCLAT has
virtually justified the non-disclosure and suppression of the

CIVIL APPEAL NO.1808 OF 2020 Page 33 of 105

 material fact in the Resolution Plan made by the JSW, with
regard to the Joint Venture agreement dated 05.03.2008.
The said Joint Venture Agreement was entered into by the
JSW, BPSL and Jai Balaji on 05.03.2008 pursuant to an
order of Government of India, in the matter of joint
allocation of Rohne Coking Coal block. These facts
suppressed by JSW in its Resolution Plan, had surfaced
during the course of the investigation in the PMLA
proceedings initiated against the Corporate Debtor and
others. Based on the said material, an issue was raised
before the NCLAT whether JSW was a ‘related party’ to
BPSL, and therefore, ineligible under Section 29A.
However, the NCLAT in its impugned judgment had
sought to justify the suppression of facts made by JSW.
Since, the issue of ‘Related Party’ was not pressed into
service by the learned advocates appearing for the
Appellants, during the course of hearing of these Appeals,
we are not stretching the issue of “related party” any
further.

(IV) MANDATORY REQUIREMENT UNDER SECTION 29A.

19. However, we certainly deem it appropriate to highlight the
statutory requirement of proper disclosure to be made by
the Resolution Applicant with regard to its eligibility under
Section 29A of the IBC. As per Section 29A, a person shall

CIVIL APPEAL NO.1808 OF 2020 Page 34 of 105

 not be eligible to submit a Resolution Plan, if such person
or any other person acting jointly or in concert with such
person, falls under any of the clauses contained in the said
Section 29A. Further, Section 30(1) read with Regulation
39(1) of the Regulations, 2016 requires that a Resolution
Applicant has to submit a Resolution Plan along with an
affidavit stating that he is eligible under Section 29A to
submit the Resolution Plan. As per Regulation 39(4), when
the Resolution Plan as approved by the CoC, is submitted
by the Resolution Professional, it has to be submitted by
him along with a compliance certificate in Form No. H of
the Schedule. The prescribed Form ‘H’, pertaining to the
compliance certificate, contained in the Schedule,
specifically requires the Resolution Professional to certify
that the Resolution Plan complies with all the provisions of
the IBC and the CIRP Regulations 2016, and that it does
not contravene any of the provisions of law, for the time
being in force. The Resolution Professional also has to
certify that the Resolution Applicant has submitted an
affidavit in compliance with Section 30(1) of the Code,
confirming its eligibility under Section 29A to submit the
plan and that the contents of the said affidavit are in order.
20. In the instant case, as transpiring from the record, the
Resolution Professional had not submitted the

CIVIL APPEAL NO.1808 OF 2020 Page 35 of 105

 Compliance Certificate in the prescribed Form ‘H’ of the
Schedule, while submitting the Company Application
being No. 254 of 2019 before the NCLT seeking approval
of the Resolution Plan under Section 31(1) read with
Section 30(6) of the IBC. In the said Company Application,
the Resolution Professional had only reproduced the
Clauses of the Resolution Plan, without submitting the
Compliance Certificate as prescribed in Form ‘H.’ In the
said Application, what has been stated by the Resolution
Professional with regard to the compliance of the
mandatory requirements under the Code, was in the form
of a Table, which is reproduced hereinbelow: -
SECTION/ REQUIREMENT CLAUSE OF THE
REGULATION RESOLUTION
PLAN
Section 29A of The disqualification Annexure 12 of the
the Code under Section 29A of Approved Resolution
the Code should not Plan
apply.
Section 30(2) (a) The Resolution Plan Clause 1.2 of Part B
of the Code provides for the of the Approved
payment of insolvency Resolution Plan
resolution process
costs in a manner
specified by the Board
in priority to the
repayment of other
debts of the corporate
debtor;
Section 30(2)(b) The Resolution Plan Clause 1.4, 1.5, 1.6
of the Code provides for the and 1.7 of Part B of
repayment of the the Approved
debts of operational Resolution Plan

CIVIL APPEAL NO.1808 OF 2020 Page 36 of 105

 creditors in such
manner as may be
specified by the Board
which shall not be less
than the amount to be
paid to the operational
creditors in the event
of a liquidation of the
corporate debtor
under Section 53.
Section 30(2)(c) The Resolution Plan Clause 1.13(iii) of
of the Code provides for the Part B read with
management of the Clause 2(a) of Part A
affairs of the of the Approved
Corporate Debtor after Resolution Plan
approval of the
resolution plan;
Section 30(2) (d) The Resolution Plan Clause 4 of Part A
of the Code provides for the read with Schedule 2
implementation and of the Approved
supervision of the Resolution Plan
resolution plan;
Section 30(2) (e) The Resolution Plan Clause 1.13(vi) of
of the Code does not contravene Part B of the
any of the provisions Approved Resolution
of the law for the time Plan
being in force;
Regulation The Resolution Plan Clause 1.9 of Part B
38(1A) of the CIR shall include a of the Approved
Regulations statement as to how it Resolution Plan
has dealt with the
interests of all
stakeholders,
including financial
creditors and
operational creditors
of the corporate
debtor.
Regulation 38(2) The Resolution Plan Schedule 2 of the
(a) of the CIR shall provide the term Approved Resolution
Regulations of the plan and its Plan

CIVIL APPEAL NO.1808 OF 2020 Page 37 of 105

 implementation
schedule
Regulation The Resolution Plan Section 3 of Part A of
38(3)(a) shall demonstrate that the Approved
it addresses the cause Resolution Plan
of default under the head
“Business
Plan/Financial
Projections”
Regulation The Resolution Plan The CoC in its 18th
38(3)(b) shall be feasible and meeting dated 14th
viable August 2018
considered the
resolution plan of
JSW Steel and
recorded that the
resolution plan is
feasible and viable.
Regulation The Resolution Plan Schedule 2 of the
38(3)(c) shall have provisions Approved Resolution
for its effective Plan providing for
implementation Steps for
Implementation of
Resolution Plan
Regulation 38(3) The Resolution Plan Section 13 of Part A
(d) shall have provisions of the Approved
for approvals required Resolution Plan
and the timeline for the
same
Regulation 38(3) The Resolution Plan Section 1 of Part A
(e) shall provide that the read with Schedule 3
resolution applicant and Annexure 1 of
has the capability to the Approved
implement the Resolution Plan and
resolution plan Net-Worth
Certificate of the
Successful
Resolution Applicant

CIVIL APPEAL NO.1808 OF 2020 Page 38 of 105

21. Thus, as evinced from the record, there was neither a
certificate given nor any statement made by the Resolution
Professional in the said Application, to the effect that the
contents of the Affidavit filed by the Resolution Applicant
with regard to its eligibility to file the Resolution Plan, were
in order. In the afore-stated Table, against the column of
requirement that “the disqualification under Section 29A of
the Code should not apply,” the Resolution Professional
has merely referred to Annexure 12 of the Approved
Resolution Plan of JSW. As elicited, the said Annexure 12
of the Approved Resolution Plan which allegedly pertained
to the mandatory disclosures, only disclosed the identity of
the Resolution Applicant and the connected persons. The
said Annexure 12 nowhere had stated about the
eligibility/ineligibility of the Resolution applicant as
required under Section 29A.
22. It is pertinent to note that in the 14th Meeting of the CoC, it
was specifically brought to the notice of the CoC by the
legal counsel of the Resolution Professional that the
Resolution Plan of the JSW was subject to the compliance
of Section 29A. However, in the later meetings there was
no clarity made as to whether the JSW had subsequently
complied with the said requirement or not. Even if it is
believed that JSW had filed an affidavit with regard to its

CIVIL APPEAL NO.1808 OF 2020 Page 39 of 105

 eligibility to submit the Resolution Plan, there is nothing on
record to show as to whether such affidavit was verified by
the Resolution Professional as he was obliged to do so in
terms of Form No. H to the Schedule annexed to the CIRP
Regulations, 2016.
23. Since, the eligibility/ineligibility of the Resolution Applicant
to submit the Resolution Plan goes to the root of the
matter, it was incumbent on the part of the Resolution
Professional to verify and certify that the contents of the
mandatory affidavit, filed by the Resolution Applicant-JSW
in respect of Section 29A were in order. The same having
not been stated in the Application filed by the Resolution
Applicant before the NCLT, it has raised serious doubt in
the mind of the Court with regard to the very eligibility of
the JSW to submit the Resolution Plan. Our said doubt is
further fortified by the observations made and justification
given by the NCLAT for the non-disclosure and
suppression made in the Resolution Plan by JSW, with
regard to the Joint Venture Agreement dated 05.03.2008
entered into by and between the JSW, BPSL and Jai Balaji
as discussed hereinabove.

CIVIL APPEAL NO.1808 OF 2020 Page 40 of 105

(V) POWERS OF NCLAT TO REVIEW THE DECISION OF
STATUTORY AUTHORITY UNDER THE PMLA: -

24. This takes us to the issue as to whether the NCLAT had

any powers of Judicial Review over the decision taken by
the Statutory Authority under the PMLA?
As per the chronology of events stated earlier, after the
NCLT vide the Order dated 05.09.2019 approved the
Resolution Plan of JSW, subject to the conditions
mentioned in para 128 thereof, the Directorate of
Enforcement of Central Government on 10.10.2019 had
provisionally attached the assets of CD-BPSL under
Section 5 of PMLA. The SRA-JSW challenged the powers
of ED to pass Provisional Attachment Order by raising an
issue in the Appeal being Company Appeal No. 957 of
2019 pending before the NCLAT. The NCLAT vide the
Order dated 14.10.2019 stayed the said PAO dated
10.10.2019, in the said Company Appeal No.957 of 2019.
25. It appears that couple of months thereafter, Section 32A
came to be inserted in the IBC by Act 1 of 2020 w.e.f.
28.12.2019, which pertained to the liability of a Corporate
Debtor for an offence committed prior to the
commencement of CIRP. The NCLAT therefore, while
deciding the Company Appeal No. 957 of 2019 filed by the
JSW along with other Company Appeals filed by the other

CIVIL APPEAL NO.1808 OF 2020 Page 41 of 105

 parties against the Order passed by the NCLT dated
05.09.2019, held in the impugned Judgment and Order
dated 17.02.2020 that in view of Section 32A(1)(2), the
Directorate of Enforcement/Investigating Agencies did not
have the powers to attach assets of Corporate Debtor,
once the Resolution Plan had stood approved, and that the
criminal investigations against the Corporate Debtor also
would stand abated. The NCLAT also declared in para 71
of the impugned Judgment that the attachment of assets
of Corporate Debtor by the ED pursuant to the order dated
10.10.2019 was illegal or without jurisdiction.
26. As stated hereinabove, the Civil Appeal Nos. 14503-14504
of 2024 arising out of the SLP(Civil) Nos. 29327-29328 of
2019 filed by the Committee of Creditors, challenging the
PAO dated 10.10.2019 passed by the ED and the Order
dated 14.10.2019 passed by the NCLAT in Company
Appeal No.957 of 2019, and the Civil Appeal No.3362 of
2020 filed by the ED against the JSW & Others challenging
the impugned Judgment dated 17.02.2020 passed by the
NCLAT in Company Appeal No. 957 of 2019, came to be
disposed of by this Court vide the Order dated 11.12.2024.
While passing the said order, it was clarified by this Court
that the said order was passed in the peculiar facts and
circumstances of the case, more particularly, the fact that

CIVIL APPEAL NO.1808 OF 2020 Page 42 of 105

 the order of provisional attachment was passed by the ED
after the Adjudicating Authority i.e. NCLT had approved
the RP submitted by the SRA. It was also clarified and that
the Court had not expressed any opinion on the
interpretation of Section 32A (2) of IBC or on the powers
of the ED to attach the property of the Corporate Debtor
which was undergoing CIRP, or on any other legal issues
involved in the other connected Appeals (i.e. the present
Civil Appeals) pending before this Court.
27. In this regard, it is pertinent to note that the NCLT and
NCLAT are constituted under Section 408 and 410 of the
Companies Act, 2013 and not under the IBC. The
jurisdiction and powers of the NCLT and NCLAT are well
circumscribed under Section 31 and Section 60 so far as
NCLT is concerned, and under Section 61 of IBC so far as
the NCLAT is concerned. Neither the NCLT nor the
NCLAT is vested with the powers of judicial review over
the decision taken by the Government or Statutory
Authority in relation to a matter which is in the realm of
Public Law. As held by a Three-judge Bench in case of
Embassy Property Developments Private Limited vs.
State of Karnataka & Ors.3 , the Section 60(5) speaks
about any question of law or fact, arising out of or in

3 (2020) 13 SCC 308

CIVIL APPEAL NO.1808 OF 2020 Page 43 of 105

 relation to insolvency resolution, but a decision taken by
the Government or a statutory authority in relation to a
matter which is in the realm of Public Law, cannot be
brought within the fold of the phrase “arising out of or in
relation to the insolvency resolution” appearing in Section
60(5)(C) IBC. It has been further held therein that in the
light of the statutory scheme as culled out from the various
provisions of the IBC, it is clear that wherever the
Corporate Debtor has to exercise a right that falls outside
the purview of the IBC, especially in the realm of the public
law, they cannot take a bypass and go before NCLT for
the enforcement of such a right.
28. In view of the settled proposition of law, when the NCLT
could not exercise the powers of judicial review falling
outside the purview of the IBC, or falling within the purview
of public law, the NCLAT also, being an Appellate
Authority under Section 61 over the orders passed by the
NCLT, could not exercise any power or jurisdiction beyond
Section 61 of IBC.
29. As held by us earlier, a person aggrieved by an order of
the Adjudicating Authority can prefer an Appeal to the
NCLAT under Section 61(1), and that an Appeal against
the order approving a Resolution Plan under Section 31
could be filed only on the grounds mentioned in clauses (i)

CIVIL APPEAL NO.1808 OF 2020 Page 44 of 105

 to (v) of sub-section (3) of Section 61. Hence, for filing an
Appeal under Section 61, there has to be an order passed
by the NCLT so far as sub-section (1) is concerned, and if
the Appeal is filed against the order of NCLT approving the
Resolution Plan under Section 31, it could be filed only on
the grounds mentioned in sub-section (3) of Section 61.
30. In the instant case, after the approval of Resolution Plan
of JSW by the NCLT on 05.09.2019, subject to the
conditions mentioned therein, the PAO came to be passed
by the ED on 10.10.2019 under Section 5 of the PMLA.
The said PAO was challenged by SRA-JSW directly in the
Company Appeal being No. 957 of 2019 filed by it before
the NCLAT, and the NCLAT vide the ex parte order dated
14.10.2019 had stayed the PAO. It is pertinent to note that
the said PAO dated 10.10.2019 was also the subject
matter of challenge before this Court in the SLPs filed by
the CoC and the same was stayed by this Court vide the
Order dated 18.12.2019 in the said SLPs. Despite such
position, the NCLAT while passing the impugned
Judgment and Order dated 17.02.2020 recorded its
findings on Section 32A of IBC to the effect that the assets
of the Corporate Debtor of which JSW was a Successful
Resolution Applicant, were immuned from attachment by
Directorate of Enforcement. Such an Order of NCLAT is

CIVIL APPEAL NO.1808 OF 2020 Page 45 of 105

 clearly in teeth of the law laid down by this Court in
Embassy Property Developments (supra). The PMLA
being a Public Law, the NCLAT did not have any power or
jurisdiction to review the decision of the Statutory Authority
under the PMLA. In our opinion, apart from the fact that
the said issue was pending before this Court in respect of
the same PAO dated 10.10.2019 and therefore the NCLAT
should not have decided the said issue, it was beyond the
jurisdiction of the NCLAT to decide the said issue in the
Company Appeal filed by JSW under Section 61 of IBC.
31. In that view of the matter, it is held that the observations
made and the findings recorded by the NCLAT in the
impugned judgment with regard to the PAO dated
10.10.2019 passed by the Directorate of Enforcement
under the PMLA, being without any authority of law and
without jurisdiction, were coram non judice.

(VI) SUBMISSIONS ON NON-COMPLIANCE OF OTHER

MANDATORY PROVISIONS AND ON EBITDA: -

32. Adverting to the other issues on merits, the learned Senior

Advocate Mr. Dhruv Mehta appearing for the Appellants
Ex-Promoters/Guarantors of the Corporate Debtor-BPSL
made the following submissions:

CIVIL APPEAL NO.1808 OF 2020 Page 46 of 105

 (i) There were gross violations of mandatory provisions
of IBC in the entire process of insolvency resolution
proceedings at the instance of Resolution
Professional, the CoC and SRA-JSW who were in
collusion with each other.
(ii) Regulation 38 of the CIRP Regulations, 2016 read
with Section 30(2) of the Code mandate payment to
the Operational Creditors to be paid in priority over
the Financial Creditors, however, the Resolution
Plan envisaged the Financial Creditors to be paid in
priority over the Operational Creditors.
(iii) The Resolution Plan was indeterminate and
unpredictable. The clause which permitted the
erstwhile lenders of CoC to enlarge the Effective
date has been misused to the prejudice of all the
stakeholders including the financial institutions,
which had led to a deliberate delay of more than 540
days in partial implementation of the plan. The SRA-
JSW made payment to the operational creditors only
in March 2022 after a period of total default of 900
days.
(iv) The SRA-JSW had secured the position of the
highest bidder by wrongly assuring the upfront
payments and infusion of funds, parameters, which

CIVIL APPEAL NO.1808 OF 2020 Page 47 of 105

 JSW had admittedly failed to comply with. There
was willful breach and malafide conduct on the part
of the SRA-JSW in causing great delay in the
implementation of the Resolution Plan beyond the
statutory time-limit, which is sufficient to set aside
the Resolution Plan of defaulting SRA.
(v) The Resolution Plan contravened the settled legal
position, while treating the secured statutory dues of
the Operational Creditors as unsecured dues, which
is also in contravention of the law laid down by this
Court in the State Tax Officer vs. Rainbow Papers
Limited.4
(vi) However, on a demurrer, the Resolution Plan if it is
sustained by this Court, the issue of Earnings Before
Interest, Tax, Depreciation and Amortization
(EBITDA) is required to be decided in favour of the
Appellants and other stakeholders, and against
JSW.
(vii) Retention of EBITDA by SRA, despite not
contributing in any manner to the operations of the
Corporate Debtor from 26.7.2017 till the interim
payment to the Financial Creditors on 26.03.2021,
and also despite the delay in making payment to the

4 (2023) 9 SCC 545

CIVIL APPEAL NO.1808 OF 2020 Page 48 of 105

 other creditors of the Corporate Debtor, would be
contrary to the scheme of the IBC.
(viii) Granting of EBITDA to the creditors, would reduce
the liability of the appellants who are the personal
guarantors.
(ix) There was no scope for negotiation between the
CoC and the SRA-JSW after the approval of the
Resolution Plan, in view of the law laid down by this
Court in Ebix Singapore Pvt. Ltd. Vs. Committee
of Creditors of Educomp Solutions Limited and
Another5.
33. The Learned Senior Advocate Mr. Diwakar Maheshwari,
Mr. Manu Beri and Mr. Arjun Asthana appearing for the
Appellants Operational Creditors i.e. Kalyani Transco, CJ
Darcl Logistics Ltd. And Jaldhi Overseas PTE Ltd.
made further following submissions in addition to the
submissions made by the learned Senior Counsel Mr.
Dhruv Mehta.
(i) The re-classification of Appellant-Jaldhi Overseas
claimed from “admitted operational creditor” to the
“identified contingent creditor” by SRA was not
permissible. The power to admit/reject the claim filed
by the Creditors vests solely with the Resolution

5 (2022) 2 SCC 401

CIVIL APPEAL NO.1808 OF 2020 Page 49 of 105

 Professional and no such power is available with the
SRA under the Code.
(ii) The re-classification of Operational Creditors claims
have resulted in inter se discrimination towards class
of Creditors, not permissible under the Code.
(iii) The NCLT had rightly directed the EBITDA/profit
generated by the Corporate Debtor during CIRP to
be distributed amongst the creditors in view of the
judgment passed by the NCLAT in the matter of
Standard Chartered Bank vs. Satish Kumar
Gupta, Company Appeal (AT) (INS) No. 242/2019
decided on 04.07.2019. Even the CoC had filed an
affidavit before the NCLAT claiming EBITDA
generated during the CIRP, however the NCLAT in
the impugned judgment directed the Monitoring
Committee along with the Resolution Professional to
go through the RFP/RFRP and distribute the
EBITDA accordingly.
(iv) There was no provision either in the IBC or in RFRP
published by the Resolution Professional or in the
Resolution Plan submitted by the SRA, which
permitted the Monitoring Committee or the Financial
Creditors/CoC to enter into any negotiations with the
SRA post the approval of the Resolution Plan. The

CIVIL APPEAL NO.1808 OF 2020 Page 50 of 105

 only provision which governed the conduct of CoC
meetings under the IBC was Section 24 which
included the representations on behalf of the
operational creditors also. Admittedly, the
Monitoring Committee did not have any
representation on behalf of the Operational
Creditors.
(v) The IBC does not provide for constitution of a
Monitoring Committee, and the Monitoring
Committee being a creature of the Resolution Plan,
its powers would be limited to the extent granted
under the Resolution Plan.
(vi) The grounds provided under Section 61(3) of the
IBC are the only grounds available to the NCLAT for
setting aside the approval of the Resolution Plan,
however the NCLAT has set aside the directions of
NCLT qua EBITDA, which does not fall within the
four corners of Section 61(3).
34. The Learned ASG, Mr. Natraj appearing for the Appellant-
State of Odisha made the following submissions: -
(i) The Appellant-State had filed its claim before the
Resolution Professional on 07.03.2018 for a total
amount of Rs. 118,85,17,796 which included the
Electricity duty along with interest till insolvency

CIVIL APPEAL NO.1808 OF 2020 Page 51 of 105

 commencement date, and the said claim though was
recorded at Serial No. 1750 on the consolidated list
of claims of Operational Creditors, there was drastic
reduction in the claim amount to INR 13,75,32,894.
(ii) In view of Section 18 read with the Regulations 10,
12, 13 and 14 of the CIRP Regulations, 2016, as
also the legal position settled in Swiss Ribbons (P)
Ltd. Vs. Union of India6, the Resolution
Professional does not possess any adjudicatory
powers under the IBC, and that his role as a
facilitator of the CIRP is only administrative in nature.
(iii) The Resolution Plan contravened Sections 30(2)
and 30(3) of the IBC and therefore was incapable of
being enforced or implemented in view of
Independent Sugar Corporation Ltd. Vs. Girish
Sriram Juneja and Others.7
(iv) The Appellant State had, via multiple letters raised
the demands for the pending Entry tax dues prior to
the initiation of CIRP and prior to the approval of
Resolution Plan by the CoC and therefore the
Resolution Professional had adequate notice of
such claim.

6 (2019) 4 SCC 17
7 2025 SCC Online SC 181

CIVIL APPEAL NO.1808 OF 2020 Page 52 of 105

35. The learned Senior Advocate Mr. Neeraj Kishan Kaul
appearing for the Respondent SRA-JSW broadly made
the following common submissions in response to the
submissions made by the learned Advocates for the
Appellants.
(i) The comprehensive resolution process of BPSL has
resulted in a payment of Rs.19,350 crores to
Financial Creditors, along with payment to
Operational Creditors of 50% recovery of their
admitted claims (capped at Rs.350 crores) by
March, 2022.
(ii) The members forming part of the erstwhile CoC had
vide its letter dated 05.03.2021 extended the
Effective Date to on or before 31.03.2021 with
97.25% majority in terms of and in accordance with
the provisions of approved Resolution Plan. The
same was brought to the notice of this Court vide the
affidavit dated 18.03.2021 filed by the members of
the erstwhile CoC in I.A. No. 42114/2021 (filed in
Civil Appeal Nos. 14503-14504 of 2024).
(iii) The SRA-JSW had brought in the entire Equity
commitment of Rs.8550 crores which is split as (a)
Rs. 100 crore of Equity shares and (b) Rs.8,450
crore of Compulsorily Convertible Debentures,

CIVIL APPEAL NO.1808 OF 2020 Page 53 of 105

 which would be converted to Equity shares. The
CCDs are regarded as Equity instruments as held by
this Court in Narender Kumar Maheshwari vs.
Union of India8.
(iv) The Ex-promoters had filed the Appeals as an
attempt to derail the successful resolution of the
Corporate Debtor BPSL.
(v) The issues regarding the implementation of the
Resolution Plan are beyond the scope of the
Appeals filed under Section 62 of the IBC.
(vi) The Resolution Plan or the RFRP of BPSL did not
contemplate distribution of EBITDA/operating profit
of BPSL generated during the CIRP period to either
the creditors or SRA - JSW. Such amounts were to
continue to remain with BPSL as it was sought to be
taken over as a going concern.
(vii) This Court while interpreting the RFRP of SRA in the
case of Committee of Creditors of Essar Steel
India Limited Vs. Satish Kumar Gupta and
Others9, has held that the EBITDA generated during
the CIRP period would not go the creditors.

8 1990 Supp. SCC 440

9 (2020) 8 SCC 531

CIVIL APPEAL NO.1808 OF 2020 Page 54 of 105

 (viii) There was no delay in implementing the Resolution
Plan as the plan has been implemented by the
Effective Date, as defined under the Resolution
Plan.
(ix) The Code or its Regulations do not require the
implementation of Resolution Plan to be carried
within the specific timeline, and the same is the
subject matter of the agreed position in a Resolution
Plan. In paragraph 4(iii) of Part A, the Effective Date
has been defined to mean the date of
implementation of the Resolution Plan, which shall
not exceed 30 days from the NCLT approval date or
such extended period which may be permitted by
66% majority of lenders forming part of the erstwhile
CoC.
(x) So far as payment to the operational creditors is
concerned, the position under Regulation 38(1) has
changed since the amendment w.e.f. 27.11.2019,
which provided for the amount payable to an
operational creditor to be paid in priority to the
Financial Creditor. The said amendment having
come into force post approval of the Resolution Plan
vide the NCLT judgment on 05.09.2019, the same
cannot be applied to the present case.

CIVIL APPEAL NO.1808 OF 2020 Page 55 of 105

 (xi) The State of Odisha had failed to file its claim with
regard to the Entry tax dues, before the Resolution
Professional, did not approach NCLT, and had filed
its Appeal against the Plan approval order directly
before the NCLAT, beyond the period of limitation.
(xii) As held in Ghanashyam Mishra and Sons (P) Ltd.
vs. Edelweiss Asset Reconstruction Co. Ltd.10,
and in case of Ruchi Soya Industries Ltd. vs.
Union of India11, once the Resolution Plan is
approved by the NCLT, the plan stands frozen and
all such claims which are not a part of Resolution
Plan as on that date stand extinguished.
(xiii) So far as the claim of State of Odisha in respect of
the Electricity dues is concerned, the Resolution
Professional, after a thorough verification of
documents and records submitted by the Appellant-
State, had admitted only Rs.13,75,32,894 though its
claim was for Rs.118,85,17,796.
(xiv) As per Regulation 13 and 14 of CIRP Regulations,
2016, the Resolution Professional has the authority
to verify the claims submitted by the creditors and to
determine the amount claimed by the Creditors.

10 (2021) 9 SCC 657

11 (2022) 6 SCC 343

CIVIL APPEAL NO.1808 OF 2020 Page 56 of 105

 (xv) So far as the Appellant Jaldhi Overseas is
concerned, the Appellant has been rightly
categorized as an Operational Creditor with a
contingent claim, on the basis of the balance sheets
of the Corporate Debtor and Section 49 of the
Arbitration and Conciliation Act, 1996. The sub-
classification of Operational Creditors into the
contingent Operational Creditors and the Crystalized
Operational Creditors under the Resolution Plan is
permissible under the law.
36. The learned Senior Advocate Dr. Abhishek Manu Singhvi
appearing for the CoC made the following submissions:
(i) The erstwhile Promoters who had ceased to have
any relationship with Corporate Debtor once the
CIRP had commenced, could not be said to have
been prejudiced with respect to the implementation
of Resolution Plan.
(ii) The issues raised by the erstwhile Promoters with
respect to implementation of the Resolution Plan are
nothing but a malafide attempt to scuttle a
successfully implemented Resolution Plan. The
issues raised by them did not fall within the ambit of
Section 62 of IBC.

CIVIL APPEAL NO.1808 OF 2020 Page 57 of 105

 (iii) Though CoC as a juristic body had become functus
officio after approval of Resolution Plan by the
NCLAT, in the facts of the case, the lenders of BPSL
forming part of CoC were specifically empowered in
terms of the Resolution Plan read with the impugned
judgment of NCLAT to convene and take decisions
that were necessary for successful implementation
of the Resolution Plan.
(iv) The lenders of BPSL forming part of the CoC in their
commercial wisdom had taken steps to ensure
implementation of Resolution Plan to the benefit of
all stakeholders of the Corporate Debtor. Though
there was a delay of about two years in the
implementation of the Resolution Plan, the lenders
of BPSL forming part of CoC have taken commercial
call in prioritizing the implementation of the
Resolution Plan.
(v) As per the understanding of the lenders of BPSL, at
the time of plan implementation, the SRA infused
only Rs. 100 crores as share capital towards Equity
contribution, and the delay of remaining Rs. 8,450
Crores by way of convertible debentures was due to
the uncertainty created because of the attachment
of assets of BPSL by the ED. The refund obligation

CIVIL APPEAL NO.1808 OF 2020 Page 58 of 105

 was created on the lenders in the event of Appeals
before this Court succeed as recorded vide the
06.03.2021 order, and subsequently in the Escrow
Agreement entered into with the SRA dated
19.03.2021.
(vi) During the meeting held on 26.03.2021 by the
Reconstituted Board which was attended by the
Steering Committee, the issuance of Compulsory
Convertible Debentures to Piombino Steel Limited
(group entity of SRA which was to be merged into
BPSL as a part of the Resolution Plan) having a
value Rs. 8,450 Crores was approved. Such
issuance of CCD’s cannot be said to be a departure
from the requirement under the Resolution Plan of
infusion of Rs. 8,550 Crores as Equity.
37. The learned Senior Advocate Mr. Shyam Diwan appearing
for the erstwhile Resolution Professional Mr. Khandelwal,
in his brief address to the Court submitted that the
Resolution Plan having been implemented during the
pendency of these Appeals, the Court may not interfere
with the impugned judgment and order passed by the
NCLAT, more particularly when no question of law had
arisen out of the impugned judgment of NCLAT, as
contemplated in Section 62 of IBC.

CIVIL APPEAL NO.1808 OF 2020 Page 59 of 105

(VII) NON-COMPLIANCE OF MANDATORY PROVISIONS
AND MISUSE OF PROCESS OF LAW: -

38. Having regard to the elaborate submissions made by the

learned Senior Advocates appearing for the parties,
having thoroughly gone through the voluminous record
relied upon by them, as also having regard to the various
judicial pronouncements made by this Court on the
interpretation of various provisions of IBC, it appears that
in the instant set of Appeals, the respondents-JSW, CoC
and Resolution Professional have sought to sweep many
seminal issues under the carpet to cover up gross
violations of the provisions of the IBC and of the
Regulations 2016, at every stage of the CIR proceedings
initiated against the CD-BPSL. We therefore have
examined the non-compliance rather violations of
mandatory provisions of the IBC at their instance at the
pre-approval and post-approval stages of Resolution Plan
of JSW.
39. We are quite conscious to the submissions made by the
Learned Advocates appearing for the Respondents JSW,
CoC and for the Resolution Professional that Resolution
Plan in question has been implemented in part by making
payments to the Financial Creditors in March, 2021 and in
full by making payments to the Operational Creditors in

CIVIL APPEAL NO.1808 OF 2020 Page 60 of 105

 March, 2022. According to them, though JSW initially
infused only Rs.100 Crores as share capital towards
Equity contribution commitments, subsequently pending
the present Appeals, the reconstituted Board in its meeting
held on 26.03.2021 has approved the issuance of
Compulsory Convertible Debentures to Piombino Steel
Limited (group entity of SRA-JSW which was to be merged
into BPSL) having value of Rs.8,450 Crores, and thus
requirement of infusion of Rs.8,550 Crores was complied
with. We are not impressed with the said submissions.
40. In this regard, the relevant Clause 2.3 with regard to Equity
Commitment and Clause 3.1 with regard to the stages of
implementation of the Resolution Plan are reproduced-

“2.3 Equity Commitment

As part of the Resolution Plan, the Resolution
Applicant also proposes to infuse equity into the
Company, for an amount aggregating INR 8550 Crores
which shall be infused by the Resolution Applicant
upfront on the Effective Date, the uses of which are
stated elsewhere in the resolution plan. The
aforementioned amounts are collectively referred to as
"Equity Commitment". (see Section 4(v) and (vi) of
Part A of this Resolution Plan).”
“3. RESOLUTION PLAN - STAGE OF
IMPLEMENTATION
3.1 The Resolution Applicant proposes to:
(a) undertake all efforts to procure the satisfaction
of each Conditions Precedent within a period of 30
days from the date of issuance of LOI and in any case

CIVIL APPEAL NO.1808 OF 2020 Page 61 of 105

 prior to approval of the Resolution Plan by NCLT. The
Resolution Applicant shall immediately after the NCLT
Approval Date, notify the Monitoring Professional and
the Steering Committee in writing ("CP Satisfaction
Notice") the date(s) on which it proposes to complete
the steps set out in Schedule 2 (Steps for
Implementation of the Resolution Plan) and if such
steps are to be implemented with receipt of the
Specified Approval mentioned Paragraph 4(ii)(a) (II) or
in the absence of the same (and in the manner
specified in such paragraph) ("Effective Date"), which
date shall in any event not exceed 30 (thirty) days from
the NCLT Approval Date or such extended period
which may be permitted by 66% majority of the lenders
forming part of the erstwhile CoC; and
(b) implement the Resolution Plan through the
SPV, which will merge with the Company in the manner
as set out in Schedule 2 (Steps for Implementation
of the Resolution Plan).”

41. Except bare submissions made by the learned advocates

during the course of hearing, there is no material or
affidavit placed on record by the Respondent JSW to show
that the Equity Commitment as contemplated in the
aforestated clauses, which was condition precedent, was
fulfilled by it. There is also no material placed on record by
it to show that the Effective date as contemplated in its
Resolution Plan was extended after the order of NCLT or
NCLAT as per Clause 3.1 of the Resolution Plan. There
is nothing on record to show as to how, when and by whom
the Effective date as contemplated in the Resolution Plan
was extended. If the Effective date was surreptitiously

CIVIL APPEAL NO.1808 OF 2020 Page 62 of 105

 extended by some lenders, claiming to be part of CoC
which had become functus officio and which had no
authority to do so, any payment made or Equity infused by
JSW under the garb of such decision, cannot be vindicated
by the Court. When the SRA-JSW, CoC and Resolution
Professional are being represented by very eminent
Advocates, non-production of such relevant material with
regard to infusion of Equity and extension of Effective
date, to substantiate their submissions, cannot be without
any purpose. It therefore raises serious doubts about the
legality of such actions and genuineness of the so-called
compliance of Resolution Plan, pending these Appeals.
42. Even it is assumed for the sake of arguments that pending
the present Appeals, the terms of the Resolution Plan
have been complied with, it may be noted that no party can
be permitted to deliberately create a situation where the
proceedings in the Court would be frustrated or the Court’s
decision would become irrelevant or ineffective. A situation
of fait accompli cannot be permitted to be created in the
Court to frustrate the proceedings, more particularly when
the CIR proceedings had ex facie stood vitiated on
account of non-compliance of the mandatory provisions of
law and on account of the misuse of the process of law by
the parties. Any action taken or any deal/any settlement

CIVIL APPEAL NO.1808 OF 2020 Page 63 of 105

 entered into by and between the parties in respect of the
subject matter of the proceedings, have to pass the test of
judicial scrutiny and would always be subject to the final
outcome and adjudication of the proceedings.
43. It has been reiterated time and again by this Court that one
of the main objects for enacting the IBC is to complete the
entire CIR Proceedings in a time bound manner, and that
is the reason, a time-line is set out in the Code and its
Resolutions for every stage of the proceedings. As well
settled, time is a crucial factor of the scheme under IBC.
To allow the proceedings to lapse into indefinite delay will
frustrate the very object of the Code. The first and foremost
time-limit set out for completion of Insolvency Resolution
Process is in Section 12 which reads as under-
“12. Time-limit for completion of insolvency
resolution process.
(1) Subject to sub-section (2), the corporate insolvency
resolution process shall be completed within a period
of one hundred and eighty days from the date of
admission of the application to initiate such process.
(2) The resolution professional shall file an application
to the Adjudicating Authority to extend the period of the
corporate insolvency resolution process beyond one
hundred and eighty days, if instructed to do so by a
resolution passed at a meeting of the committee of
creditors by a vote of sixty-six per cent. of the voting
shares.
(3) On receipt of an application under sub-section (2),
if the Adjudicating Authority is satisfied that the subject
matter of the case is such that corporate insolvency

CIVIL APPEAL NO.1808 OF 2020 Page 64 of 105

 resolution process cannot be completed within one
hundred and eighty days, it may by order extend the
duration of such process beyond one hundred and
eighty days by such further period as it thinks fit, but
not exceeding ninety days:
Provided that any extension of the period of corporate
insolvency resolution process under this section shall
not be granted more than once.
Provided further that the corporate insolvency
resolution process shall mandatorily be completed
within a period of three hundred and thirty days from
the insolvency commencement date, including any
extension of the period of corporate insolvency
resolution process granted under this section and the
time taken in legal proceedings in relation to such
resolution process of the corporate debtor:
Provided also that where the insolvency resolution
process of a corporate debtor is pending and has not
been completed within the period referred to in the
second proviso, such resolution process shall be
completed within a period of ninety days from the date
of commencement of the Insolvency and Bankruptcy
Code (Amendment) Act, 2019.”
44. It may be noted that the last two provisos that is the second
and third provisos to Section 12 have been inserted by the
Act 26 of 2019, which came into force with effect from
16.08.2019. Therefore, prior to 16.08.2019, there was only
one proviso to Section 12. In the instant case, since the
CIRP had commenced on 26.07.2017, when the Company
Petition filed by the Punjab National Bank for initiating the
insolvency proceedings was admitted by the NCLT, we will
have to consider the position of Section 12 as it stood prior
to its amendment on 16.08.2019.

CIVIL APPEAL NO.1808 OF 2020 Page 65 of 105

45. This Court in Arcelormittal India Private Limited vs.
Satish Kumar Gupta and Others12, had an occasion to
deal with Section 12 as it stood prior to the said
amendment, which came into force with effect from
16.08.2019. It has been held as under: -

“73. The time-limit for completion of the insolvency

resolution process is laid down in Section 12. A period
of 180 days from the date of admission of the
application is given by Section 12(1). This is
extendable by a maximum period of 90 days only if the
Committee of Creditors, by a vote of 66% [It is pertinent
to note that the Insolvency and Bankruptcy Code
(Second Amendment) Act, 2018 (26 of 2018), inter alia,
amended the Code, with retrospective effect from 6-6-
2018, insofar as the requirement in certain sections of
approval of 75% of the Committee of Creditors for
various decisions was reduced to 51% in Section 21(8)
(i.e. the minimum percentage of votes required for any
decision of the Committee, where not otherwise
provided for in the Code), and to 66% in Sections 12(2)
(i.e. extension of time for completion of the process by
90 days), 22(2) (i.e. appointment of resolution
professional), 27(2) (i.e. replacement of resolution
professional), 28(3) (i.e. approval for certain actions by
the resolution professional), 30(4) (i.e. approval of
resolution plan), and 33(2) (i.e. initiation of liquidation),
votes to extend the said period, and only if the
adjudicating authority is satisfied that such process
cannot be completed within 180 days. The authority
may then, by order, extend the duration of such
process by a maximum period of 90 days [see Sections
12(2) and 12(3)]. What is also of importance is the
proviso to Section 12(3) which states that any
extension of the period under Section 12 cannot be
granted more than once. This has to be read with the
third proviso to Section 30(4), which states that the

12 (2019) 2 SCC 1

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 maximum period of 30 days mentioned in the second
proviso is allowable as the only exception to the
extension of the aforesaid period not being granted
more than once.

74. What is important to note is that a consequence is

provided, in the event that the said period ends either
without receipt of a resolution plan or after rejection of
a resolution plan under Section 31. This consequence
is provided by Section 33, which makes it clear that
when either of these two contingencies occurs, the
corporate debtor is required to be liquidated in the
manner laid down in Chapter III. Section 12, construed
in the light of the object sought to be achieved by the
Code, and in the light of the consequence provided by
Section 33, therefore, makes it clear that the periods
previously mentioned are mandatory and cannot be
extended.

75. In fact, even the literal language of Section 12(1)

makes it clear that the provision must read as being
mandatory. The expression “shall be completed” is
used. Further, sub-section (3) makes it clear that the
duration of 180 days may be extended further “but not
exceeding 90 days”, making it clear that a maximum of
270 days is laid down statutorily. Also, the proviso to
Section 12 makes it clear that the extension “shall not
be granted more than once”.

46. In view of the above, it is explicitly made clear that the

provision contained in Section 12(1) is mandatory in
nature as the expression “shall be completed” is used.
Sub-section (3) further makes it clear that the duration of
180 days may be extended further “but not exceeding 90
days”, meaning thereby a maximum of 270 days’ time limit
is statutorily laid down. The proviso to Section 12 also

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 further clarifies that the extension of period of CIRP under
the said Section shall not be granted more than once.
Therefore, there remains no shadow of doubt that prior to
insertion of two provisos by way of amendment in Section
12 which came into force w.e.f 16.08.2018, the entire
CIRP proceedings had to be completed within maximum
period of 270 days from the date of admission of the
Application to initiate such process.
47. The Company Petition filed by the Punjab National Bank
was admitted by the NCLT vide the Order dated
26.07.2017 on which date Mr. Khandelwal was appointed
as an Interim Resolution Professional for the Corporate
Debtor. Therefore, the date 26.07.2017 was the date of
admission of the Application to initiate the CIRP against
the Corporate Debtor BPSL. The appointment of Mr.
Khandelwal as the Resolution Professional was confirmed
by the CoC in its first meeting held on 01.09.2017.
Thereafter the CIRP proceedings were conducted by him.
The Company Application being No. 254 of 2019 was
submitted by him to the NCLT on 14.02.2019 for the
approval of the Resolution Plan of JSW as approved by
CoC, stating inter alia that the Consolidated Resolution
Plan along with the Addendum Letter was approved by the
CoC in its 19th Meeting. Thereafter the members of CoC

CIVIL APPEAL NO.1808 OF 2020 Page 68 of 105

 had participated in the Scheduled e-voting Process and
the Resolution Plan along with Addendum Letter was
approved by the requisite majority of CoC. Thus, the
process, which was required to be completed within a
maximum period of 270 days from the date 26.07.2017 i.e.
the date of the initiation of proceedings, the Resolution
Plan of JSW was sought to be placed before the NCLT for
the approval under Section 31 after almost one and a half
year on 14.02.2019.
48. As per sub-section (2) of Section 12 the Resolution
Professional was required to file an application to the
Adjudicating Authority i.e. NCLT to extend the period of the
corporate insolvency resolution process beyond 180 days,
if he was instructed to do so by a resolution passed at a
meeting of CoC by a vote of 66% of voting shares.
Meaning thereby it was incumbent on the part of the
Resolution Professional to bring to the notice of the CoC
about the expiry of 180 days and seek instructions in that
regard from the CoC. However, no such application,
appears to have been filed by the Resolution Professional,
nor any order extending the said time limit appears to have
been passed by the NCLT.
49. It is also pertinent to note that there is a model time-line
prescribed for the completion of CIRP proceedings in

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 Regulation 40A of the Regulations, 2016. As per
Regulation 39(4) also the Resolution Professional is
required to submit the Resolution Plan approved by the
CoC to the Adjudicating Authority at least 15 days before
the maximum period for completion of CIRP under Section
12. However, no such application was filed by the
Resolution Professional as contemplated in sub-section
(2) of Section 12 seeking extension of time before the
expiry of 180 days nor he had submitted the Resolution
Plan approved by the CoC before the maximum period for
completion of CIRP prescribed under Section 12, as
contemplated in Regulation 39(4) of the Regulations.
50. The Resolution Professional had filed the Company
Application No. 254 of 2019 on 14.02.2019 seeking
approval of the NCLT under Section 31, stating inter alia
that the Consolidated Resolution Plan along with the
Addendum Letter was approved by the CoC in its 19th
Meeting, and thereafter the members of CoC had
approved the same by requisite majority, following the e-
voting process. It appears that the 19th Meeting of CoC
was held on 10.10.2018 and the e-voting had taken place
on 15.10.2018, 5.00 p.m. and 16.10.2018, 5.00 p.m. on
the Central Depository Services (India Limited). As stated
in the said Application by the Resolution Professional, he

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 had received a post facto approval from the Indian Bank
for the Consolidated Resolution Plan vide its e-mail dated
16.10.2018, and he had placed the result of voting in the
sealed cover before the Appellate Authority i.e. NCLAT
vide the affidavit dated 21.10.2018. He thereafter filed the
said Application under Section 31 before the NCLT on
14.02.2019 clearly after the expiry of 270 days of the
initiation of CIRP.
51. The Resolution Professional appears to have justified the
delay in filing the Application under Section 31 on the
ground that the Appeal No. 198 of 2018 filed by Tata Steel,
one of the Prospective Resolution Applicant, was pending
before the NCLAT, and that NCLAT had reserved the
judgment of the said Appeal on 28.12.2018, and
pronounced on 04.02.2019. In this regard, it may be noted
that the NCLAT in the said Appeal filed by the Tata Steel,
had initially passed interim orders on 09.05.2018 and
24.05.2018, however it had modified the said orders by
passing the following order on 12.07.2018: -
“In the meantime, it will be open to the Committee of
Creditors to pass appropriate order in terms of Section
30(4) of IBC and if any plan has approved, the
Resolution Professional may place it before the
Adjudicating Authority for appropriate order under
Section 31 of IBC and the Adjudicating Authority may
pass appropriate order. Interim orders passed earlier
stand modified to the extent above.”

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52. Therefore, in view of the said order dated 12.07.2018, the
CoC was permitted to pass appropriate orders in terms of
Section 30(4), and if the plan was approved, the
Resolution Professional was also permitted to place the
same before the NCLT for appropriate order under Section
31 of IBC, and the NCLT was also permitted to pass
appropriate order thereon. Therefore, the CoC, Resolution
Professional and the NCLT, all were permitted to proceed
with the proceedings, in view of the Order dated
12.07.2018.
53. It appears that though the e-voting process was conducted
on 15.10.2018-16.10.2018, the so-called approved Plan
was placed before the NCLT for its approval under Section
31 only on 14.02.2019. There is no justification
whatsoever submitted by the Resolution Professional as
to why the said Application for approval of the Plan was
filed after almost four months. Such an Application filed by
the Resolution Professional being ex-facie in
contravention of Section 12 read with Regulation 39(4) of
the Regulations 2016, should not even have been
entertained by the NCLT.
54. As stated earlier, the consequences of not receiving the
Resolution Plan under sub-section (6) of Section 30 before
the expiry of CIRP period or the maximum period

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 permitted for completion of the CIRP under Section 12,
have been laid down in Section 33, according to which the
NCLT had to pass an order requiring the Corporate Debtor
to be liquidated in the manner laid down in Chapter III of
IBC. In the instant case, the Resolution Professional had
utterly disregarded the mandatory timeline contained in
Section 12 setting out the time limit for completion of CIRP,
had not even bothered to seek any extension from the
NCLT before the expiry of 180 days from the
commencement of the said process nor had bothered to
explain in the Application under Section 31 as to how the
entire CIRP proceedings were conducted in a time bound
manner and particularly within time limits prescribed under
Section 12 of IBC read with Regulation 39(4) and
Regulation 40A of the Regulations, 2016. Even the NCLT
also while passing the order dated 05.09.2019 approving
the Resolution Plan of JSW under Section 31, had failed
to verify as to whether the said Application of the
Resolution Professional was within the time limit
prescribed under Section 12 which was mandatory in
nature as held by this Court in Arcelormittal India Private
Limited (supra).
55. At this juncture, it may be noted that this Court in a
subsequent judgment in ESSAR Steel India Ltd.

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 Committee of Creditors Vs. Satish Kumar Gupta13 had
dealt with the two provisos subsequently inserted in
Section 12 by the Act 26 of 2019, which came into effect
from 16.08.2019, and had observed as under: -
“127. ……Thus, while leaving the provision otherwise
intact, we strike down the word “mandatorily” as being
manifestly arbitrary under Article 14 of the Constitution
of India and as being an excessive and unreasonable
restriction on the litigant's right to carry on business
under Article 19(1)(g) of the Constitution. The effect of
this declaration is that ordinarily the time taken in
relation to the corporate resolution process of the
corporate debtor must be completed within the outer
limit of 330 days from the insolvency commencement
date, including extensions and the time taken in legal
proceedings. However, on the facts of a given case, if
it can be shown to the Adjudicating Authority and/or
Appellate Tribunal under the Code that only a short
period is left for completion of the insolvency resolution
process beyond 330 days, and that it would be in the
interest of all stakeholders that the corporate debtor be
put back on its feet instead of being sent into liquidation
and that the time taken in legal proceedings is largely
due to factors owing to which the fault cannot be
ascribed to the litigants before the Adjudicating
Authority and/or Appellate Tribunal, the delay or a large
part thereof being attributable to the tardy process of
the Adjudicating Authority and/or the Appellate
Tribunal itself, it may be open in such cases for the
Adjudicating Authority and/or Appellate Tribunal to
extend time beyond 330 days. Likewise, even under
the newly added proviso to Section 12, if by reason of
all the aforesaid factors the grace period of 90 days
from the date of commencement of the Amending Act
of 2019 is exceeded, there again a discretion can be
exercised by the Adjudicating Authority and/or
Appellate Tribunal to further extend time keeping the

13 2020(8) SCC 531

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 aforesaid parameters in mind. It is only in such
exceptional cases that time can be extended, the
general rule being that 330 days is the outer limit within
which resolution of the stressed assets of the corporate
debtor must take place beyond which the corporate
debtor is to be driven into liquidation”.

56. Apart from the fact that the two provisos subsequently
inserted in Section 12 w.e.f. 16.08.2019 were not
applicable to the facts of the present case, the CIRP
against BPSL having been initiated on 26.07.2017 and the
Resolution Professional having filed the Application under
Section 31 on 14.02.2019, even the maximum period of
330 days including the time taken in legal proceedings had
expired much prior to filing of the said Application under
Section 31 on 14.02.019.
57. In that view of the matter, we have no hesitation in holding
that the Application submitted by the Resolution
Professional seeking approval of the Resolution Plan of
JSW under Section 31 being hit by Section 12 of IBC, the
NCLT had committed grave error of law in approving the
said plan vide its order dated 05.09.2019.
58. Even if it is assumed that the Application filed by the
Resolution Professional seeking approval of the Resolution
Plan of JSW under Section 31 was not hit by Section 12,
and that the CIR proceedings conducted by him was within
the time limit prescribed under Section 12, in view of the

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 order dated 04.02.2019 passed by the NCLAT in the
Company Appeal being No.198 of 2018 preferred by the
Tata Steel Limited vs. Liberty House Group Private
Limited, directing the period of pendency of the Appeal,
that is the period from 07.05.2018 to 04.02.2019 to be
excluded for the purpose of counting the period of 270
days, then also according to us for the reasons to follow,
there has been gross non-compliance of the mandatory
provisions of the IBC and its Regulations, vitiating the
entire CIR proceedings.
59. It cannot be gainsaid that as per the scheme of the Act, the
role of the Resolution Professional while conducting the
entire CIRP, is not only of an Administrator or Facilitator,
but is also of an Invigilator, to ensure that the CIR
proceedings are completed in a time bound manner, for
maximisation of value of assets in order to balance the
interest of the stakeholders and that there is compliance of
all the mandatory provisions of the Code during the course
of entire proceedings. As per Section 17, from the date of
appointment of Interim Resolution Professional, the
Management of the affairs of the Corporate Debtor vests in
the Interim Resolution Professional, and he is responsible
for complying with all the requirements under any law for
the time being in force on behalf of the Corporate Debtor.

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 As per Section 20, the Interim Resolution Professional is
required to make every endeavour to protect and preserve
the value of the property of the Corporate Debtor and
manage the operations of the Corporate Debtor as a going
concern. The duties of Interim Resolution Professional are
enumerated in Section 18, and the duties of Resolution
Professional are enumerated in Section 25. A very
significant duty which is cast upon the Resolution
Professional under Section 30(2) after the receipt of the
Resolution Plans from the Prospective Resolution
Applicants, is to examine each of such Resolution Plans
and confirm that each Resolution Plan provided for the
payment of Insolvency Resolution Process costs in the
manner specified by the Board in priority to the payment of
other debts of the Corporate Debtor; and provided for the
payment of debts of Operational Creditors in such manner
as may be specified by the Board. The Resolution
Professional is required to confirm that each Resolution
Plan provides for the matters stated in Section 30(2), and
also specifically confirm that the Resolution Plan does not
contravene any of the provisions of the law for the time
being in force, and conforms to such other requirements as
may be specified by the Board. Sub-section (3) of Section
30 states that the Resolution Professional shall present to

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 the Committee of Creditors for its approval such Resolution
Plans which confirm the conditions referred to in sub-
section (2). It is therefore, incumbent on the part of
Resolution Professional to examine each Resolution Plan
received by him and to confirm that each plan provided for
the matters stated in sub-section (2) of Section 30. He has
to present to the CoC for its approval, only such Resolution
Plans which confirm the conditions referred to in sub-
section (2).
60. It is also required to be noted that as per sub-section (1) of
Section 31, the Adjudicating Authority is empowered to
approve only such Resolution Plan approved by the
Committee of Creditors under sub-section (4) of Section
30, which meets the requirements as referred to in sub-
section (2) of Section 30. Meaning thereby, not only that
the Resolution Professional has to confirm that the
Resolution Plan presented before the CoC for its approval
confirmed the conditions referred to in sub-section (2) of
Section 30, the Adjuciating Authority is also required to
satisfy itself that the Resolution Plan presented by the
Resolution Professional and approved by the CoC under
sub-section (4) of Section 30, met with the requirements as
referred to in sub-section (2) of Section 30. The said
requirements as per Section 30(2), (as it stood prior to its

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 amendment w.e.f. 16.08.2019) were to confirm that the
Resolution Plan provided for the payment of Insolvency
Resolution Process costs in priority to the payment of other
debts of the Corporate Debtor; and also provided for the
payment of the debts of Operational Creditors, which
should not be less than the amount paid to the Operational
Creditors, in the event of a liquidation of the Corporate
Debtor under Section 53.
61. At this juncture, it would be also relevant to refer to some
of the CIRP Regulations, 2016, made by the Insolvency
and Bankruptcy Board of India. The Regulation 37 of the
said Regulations 2016 states that a Resolution Plan shall
provide for the measures, as may be necessary for
Insolvency Resolution of the Corporate Debtor for
maximisation of value of its assets. Some of the measures
required to be provided in the Resolution Plan have been
stated in the Regulation 37 itself. Further Regulation 38
pertaining to the Mandatory contents of the Resolution
Plan, as it stood prior at the relevant time, read as under: -
“38. Mandatory contents of the resolution plan. –
(1) The amount due to the operational creditors under
a resolution plan shall be given priority in payment over
financial creditors.
(1A) A resolution plan shall include a statement as to
how it has dealt with the interests of all stakeholders,

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 including financial creditors and operational creditors,
of the corporate debtor.
(1B) ………………
(2) A resolution plan shall provide:
(a) the terms of the plan and its implementation
schedule;
(b) the management and control of the business of the
corporate debtor during its term; and
(c) adequate means for supervising its implementation.
(3) A resolution plan shall demonstrate that –
(a) it addresses the cause of default;
(b) it is feasible and viable;
(c) it has provisions for its effective implementation;
(d) it has provisions for approvals required and the
timeline for the same; and
(e) the resolution applicant has the capability to
implement the resolution plan.”

The said Regulation 38(1) was amended from time to time

and lastly by Notification dated 27.11.2019, the relevant
part thereof reads as under: -
“38(1) Mandatory contents of Resolution Plan:-
(1) The amount payable under a resolution plan –
(a) to the operational creditors shall be paid in
priority over financial creditors; and
(b) to the financial creditors, who have a right to
vote under sub-section (2) of Section 21 and did not
vote in favour of the resolution plan, shall be paid in
priority over financial creditors who voted in favour of
the plan.”

62. Thus, the Regulation 38, whether it stood prior to or after

the amendment required that the Resolution Plan

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 proposed by the Resolution Applicant must provide for the
amount due to the Operational Creditors under the
Resolution Plan by giving priority in payment over Financial
Creditors. It must also provide the terms of the plan, its
implementation schedule, the management and control of
the business of the Corporate Debtor during its term, and
adequate means for supervising its implementation. The
Resolution Plan also must demonstrate that it addresses
the cause of default; it is feasible and viable; it has
provisions for its effective implementation; it has provisions
for approvals required; and the Resolution Applicant has
the capability to implement the Resolution Plan.
63. The CIRP Regulations, 2016 have been made by the
Insolvency and Bankruptcy Board of India in exercise of the
powers conferred under Section 5, 7, 9, 14, 15, 17, 18, 21,
24, 25, 29, 30, 196 and 208 read with Section 240 of the
IPC. The said Regulations being subordinate legislation
having statutory force, have the same binding effect as the
Code itself. Therefore, the mandates given in the said
Regulations to carry out the provisions of the Code have to
be strictly complied with by all the stakeholders as well as
by the Authorities under the Code. However, in the instant
case, the Resolution Applicant - JSW had submitted the

CIVIL APPEAL NO.1808 OF 2020 Page 81 of 105

 Resolution Plan in complete contravention of the mandates
given in the Code as well as in the Regulations.
64. As set out earlier, the Resolution Professional had utterly
failed in discharging his duties under the Code, by not
making Application for extension of time under Section 12
and by not certifying as to whether the Resolution
Applicant-JSW was an “eligible” person under Section 29A
to submit the plan. He also had failed to make any
Applications for avoidance of transactions in accordance
with Chapter-III of the Code. When the RBI had issued
directions to the Indian Banks to mandatorily initiate CIRP
against infamously known as “dirty dozen” companies, and
when BPSL was one of them, it was obligatory on the part
of the Resolution Professional to discharge his statutory
duty cast upon him to file Applications for avoidance of
transactions in accordance with Chapter-III of IBC.
65. The Resolution Professional had also failed to confirm that
the Resolution Plan of JSW met with the requirements
under Section 30(2) more particularly with regard to non-
contravention of any provision of law and with regard to the
payment of debts to the Operational Creditors in priority.
As per Sub-regulation (1) of Regulation 38 as it stood prior
to its amendment in November, 2019, the amount due to
the Operational Creditors under a Resolution Plan had to

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 be given priority in payment over the Financial Creditors.
However, in the Resolution Plan, the said mandatory
requirement was not complied with and the dues of
Financial Creditors were given priority over the dues of the
Operational Creditors.
66. Despite such gross non-compliances of the mandatory
provisions of IBC and the CIRP Regulations 2016, the
Resolution Professional placed the Resolution Plan of JSW
before the CoC. The CoC also without verifying the
mandatory requirements of Regulation 38 particularly with
regard to the feasibility and viability of the plan, effective
implementation of the plan and the capability of Resolution
Applicant to implement the plan, permitted the Resolution
Applicant to submit the Consolidated Resolution Plan with
Addendum Letter, which otherwise had many loose ends.
Just as the Resolution Professional had failed to examine
and confirm the compliance of mandatory provisions of the
Code, to secure the interests of all the stakeholders
involved in the process, the CoC also did not discharge its
duty to carefully examine the feasibility and viability of the
plan, and the capacity and resources of the Resolution
Applicant-JSW for the implementation of the plan proposed
by it.

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67. As transpiring from the minutes of 18th and 19th Meetings
held on 14.08.2024 and 10.10.2024 respectively, a very
strange procedure was followed by the CoC. As recorded
in the Minutes of 18th Meeting of CoC held on 14.08.2018,
Resolution Applicant JSW had acquired highest score
amongst the three Prospective Resolution Applicants, but
there was no declaration made as to H1 and H2. It further
appears from the Minutes of 19th Meeting that thereafter
the negotiations had taken place between the Core
Committee comprising of Small Group of Lenders and the
Resolution Applicant JSW only, pursuant to which the
Consolidated Resolution Plan was submitted by JSW on
03.10.2018. The said Consolidated Resolution Plan of
JSW was circulated to the members of CoC on 05.10.2018.
The said Consolidated Resolution Plan of JSW along with
its Letter dated 10.10.2018 (Addendum Letter) was
considered by the CoC at its 19th Meeting held on
10.10.2018. As transpiring from the Minutes of 19th
Meeting, number of objections were raised by the
representatives of the Financial Creditors and of the
Operational Creditors as regards the manner in which the
proceedings were being conducted, permitting JSW only to
submit and amend the plan submitted earlier; as regards
non-compliance of amended Regulation 38 for making

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 payment of amount due to the Operational Creditors in
priority over the payment to the Financial Creditors; as
regards the Resolution Professional having not checked
the compliances of the revised Resolution Plan of JSW,
though the CoC had pointed out that the plan of JSW
reviewed by the Resolution Professional earlier was
different from the Resolution Plan of JSW put forth
subsequently for voting; as regards the consideration of the
revised plan of JSW without the compliance certificate from
the Resolution Professional; as regards the implication and
legal obligations of the avoidance transactions and
fraudulent trading by the Corporate Debtor etc.
68. Despite such gross violation of mandatory provisions of
IBC and the CIRP Regulations in the entire proceedings
undertaken by the Resolution Professional, and by the
CoC while considering the Consolidated Resolution Plan
and Addendum Letter of JSW, the Resolution Professional
without paying any heed to the said violation or non-
compliance, submitted the said Resolution Plan of JSW for
approval before the NCLT. The NCLT also without
satisfying itself whether the Resolution Applicant-JSW was
eligible to submit the plan or not, whether the Application
for approval of plan was within the prescribed time limit
under Section 12 or not, whether the Resolution Plan

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 submitted by JSW had met the requirements as referred to
in sub-section (2) of Section 30 or not, and whether the
Resolution Plan had the provisions for its effective
implementation as required to be satisfied under proviso to
sub-section (1) of Section 31, approved the said Plan of
JSW.
69. It is pertinent to note that as per the Resolution Plan, the
Effective date for the purpose of the approved Resolution
Plan was the date not exceeding 30 days from the approval
by the NCLT of the Resolution Plan approved by the CoC,
or such extended period which may be permitted by 66%
majority of the lenders forming part of the erstwhile CoC.
The JSW had proposed in its Resolution Plan to implement
its obligation under the said plan by incorporating/
identifying a 100% wholly owned subsidiary company. It
had also proposed to invest in equity (to the extent of
Rs.8,550 Crores) of a special purpose vehicle which had
to merge with the Corporate Debtor on the appointed date
upon the approval of the Resolution Plan by the NCLT
(Section I of Part A of the Resolution Plan). The indicative
timelines for the implementation of the Resolution Plan
were also given in Clause 4 (vi) of Part A of the Resolution
Plan. The Resolution Plan provided for an upfront amount
of Rs. 19,350 Crores to be paid to the Financial Creditors

CIVIL APPEAL NO.1808 OF 2020 Page 86 of 105

 against their total admitted claims of Rs.47,157.99 Crores,
over and above the cost to be paid by the JSW. The JSW
had also undertaken to procure the satisfaction of all the
conditions precedent, as detailed in Section 4 (ii) of Part A
of its Resolution Plan, within a period of 30 days or such
other extended period approved by 66% lenders from the
date of issuance of the Letter of Intent. It had also
undertaken to immediately, after the approval of the
Resolution Plan by NCLT, notify the Monitoring and
Steering committee for taking steps for the implementation
of the Resolution Plan.
70. Despite, all these clauses and terms stated in the
Resolution Plan, on which the CoC had approved its plan
and the NCLT had also granted approval under Section 31
of IBC, the JSW instead of implementing the said Approved
Resolution Plan, challenged the judgment and order of
NCLT dated 05.09.2019 by filing an Appeal being
Company Appeal No. 957 of 2019 before the NCLAT. As
held by us in the earlier part of this judgment, such Appeal
itself was not maintainable under Section 61 of IBC. The
said terms of the Approved Resolution Plan remained
unimplemented pending the Appeal before the NCLAT,
and also during the pendency of the present Appeals
before this Court. Under the circumstances, the upfront

CIVIL APPEAL NO.1808 OF 2020 Page 87 of 105

 payments which were to be made to the Creditors within
30 days of the NCLT passing the order approving the
Resolution Plan, remained unpaid till March, 2022.
71. Pertinently, the CoC in the reply to the Application filed by
the Respondent JSW before this Court seeking clarification
of the order dated 06.03.2020, had raised serious
grievances on affidavit against the SRA - JSW for not
implementing the Resolution Plan as approved by the CoC
and further approved by NCLT. It was specifically stated
therein that the failure on the part of the JSW to resolve
one of the top 12 Corporate Insolvency cases, created a
broader concern as to the sanctity of the process under
IBC; that the conduct of JSW demonstrated ill-intent and
malafides to mislead the Court and misuse the process of
Court in order to delay and defer the implementation of the
Resolution Plan which was in fact an unconditional plan;
that though there was no stay granted by this Court on the
implementation of the plan, there was willful breach of plan
by not implementing the same; that the pendency of
Appeal or any litigation would not mean a stay on an
approved and binding Resolution Plan as per Section 31;
that by way of its in action, it is bleeding dry the public
sector banks to whom it owes Rs.19,350 Crores; that the
JSW was under an obligation under the expressed terms

CIVIL APPEAL NO.1808 OF 2020 Page 88 of 105

 of the Resolution Plan to implement the same within 30
days of its approval by NCLT; that applicability of Section
32(A) to the benefit of JSW was not a pre-condition to the
implementation of the Resolution Plan nor it would change
the unconditional commitment of JSW to implement the
plan in time bound manner; that the JSW had refuted the
rightful claim of CoC of the upfront payments as committed
in the Resolution Plan and also the compensation for not
paying the same etc. The CoC had pointed out the defaults
of JSW in not implementing the Plan and submitted that the
CIRP proceedings were languishing for more than 35
months because of the non-implementation of the
Resolution Plan at the instance of JSW. In spite of such
allegations made and grievances raised by the CoC on
affidavit before this Court, surprisingly, the CoC for the
reasons best known to it, all of a sudden changed its
stance, and accepted Rs. 19,350 Crores at a very belated
stage, offered by JSW, without any demurrer.
72. Having adumbrated the entire facts and circumstances, we
find much substance in the submissions of the learned
Senior Advocate Mr. Dhruv Mehta for the Ex-Promoters
that apart from the fact that there was gross non-
compliance of the mandatory provisions of the IBC and the
Regulations, there was a dishonest and fraudulent attempt

CIVIL APPEAL NO.1808 OF 2020 Page 89 of 105

 made by JSW, misusing the process of the Court by not
making the upfront payments as committed by it for about
two and a half years and thereby enriching itself unjustly,
and thereafter considering the rising prices of steel in the
market, JSW sought to comply with the terms of Resolution
Plan at a very belated stage, in collusion with the CoC and
the Resolution Professional. The changing stance of CoC
in the present proceedings also smacks of its bona fides
and raises serious doubts about the exercise of its so-
called commercial wisdom.
73. The position of law, propounded by this Court is that
commercial wisdom of CoC means a considered decision
taken by the CoC with reference to the commercial interest,
the interest of revival of Corporate Debtor and
maximization of value of its assets. This wisdom is not a
matter of rhetoric but is denoting a well-considered
decision by the CoC as the protagonist of CIRP. The CoC
therefore has to take into consideration the mandatory
requirements of the Code as well as the Regulations
framed by the Board, and to see that the Insolvency
Resolution of the Corporate Debtor is completed in a time
bound manner and for maximization of value of assets of
the Corporate Debtor. The mandatory requirements under
the Code are, the compliance of the time limit specified in

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 Section 12, the compliance of Section 29A to see whether
the Resolution Applicant is an eligible applicant to submit
the plan, the compliance of sub-section (2) of Section 30 of
IBC etc. The mandatory requirements stated in Regulation
38 of the Regulations, 2016 are that the Resolution Plan
must demonstrate that it addresses the cause of default,
that it is feasible and viable, it has the provisions for its
effective implementation and the Resolution Applicant has
the capability to implement the Resolution Plan in a time
bound manner. If the Resolution Plan does not comply with
such mandatory requirements and such plan is approved
by the CoC, it could not be said that the CoC had exercised
its commercial wisdom while approving such Resolution
Plan.
74. In the instant case, though the CoC in its 18th and 19th
Meetings had flagged all the issues with regard to non-
compliance of various provisions of the IBC and the
Regulations by JSW, surprisingly it approved Plan of JSW,
without any deliberation on all the compliances. Further, in
the present proceedings also after making serious
allegations against JSW of misusing the process of law and
not implementing the Resolution Plan in the time bound
manner, accepted the amount of Rs. 19,350 Crores after
about two years of the approval of Plan granted by the

CIVIL APPEAL NO.1808 OF 2020 Page 91 of 105

 NCLT, without raising any objection, and supporting the
stand of JSW about the implementation of Plan during the
course of arguments.
75. Though the commercial wisdom of the CoC should have
been given the primacy in any adjudicatory proceedings,
the changing stance of CoC from time to time during the
course of proceedings right from the holding of meetings
for approving the Resolution Plan of JSW till the final
hearing of the present Appeals, has led this Court to
believe that the CoC also has played a very dubious role in
the entire CIRP. It was stated by the CoC on affidavit
before this Court that because of the delaying tactics
adopted by JSW and deferring the implementation of the
Resolution Plan, the CoC was entitled to the compensation
and interest on the said amount of Rs.19,350 Crores for
causing loss of crores of rupees per day. Though the CoC
had written number of letters raising grievances with regard
to non-payment of upfront amount of Rs.19,350 Crores to
the Financial Creditors within 30 days of the approval of the
plan, the CoC had changed its stance all of a sudden
accepting the payment of Rs. 19350 crores without any
demurer, and though the Effective date for implementation
of the plan had already expired. As stated earlier, there is
no material placed on record as to how, when and by whom

CIVIL APPEAL NO.1808 OF 2020 Page 92 of 105

 the Effective date as stated in the Resolution Plan was
extended. During the course of arguments also Dr.
Abhishek Manu Singhvi appearing for the CoC supported
the submissions made by the learned Senior Counsel Mr.
Neeraj Kishan Kaul for JSW to the effect that the
Resolution Plan was implemented in part in March 2021 by
making payment of Rs.19,350 Crores to Financial
Creditors and making payment to the Operational Creditors
in March 2022, and therefore the Appeals of the Appellants
were required to be dismissed. Such a contradictory stands
taken by the CoC at various stages of proceedings clearly
proves that CoC had played foul and had not exercised its
commercial wisdom in the interest of the Creditors.
76. The SRA-JSW also made misrepresentations before the
CoC, presenting a very rosy picture of Resolution Plan at
the time of evaluation process conducted during the 18th
Meeting and after securing the highest score as per the
evaluation matrix, amended the said Plan, under the guise
of compliance of the amended provisions of the
Regulations, by submitting the Consolidated Resolution
Plan with Addendum. Though the said plan was got
approved from the NCLT by the Resolution Professional
without confirming the compliance of Section 30(2) and the
Regulations 38 and 39, JSW instead of complying with the

CIVIL APPEAL NO.1808 OF 2020 Page 93 of 105

 terms and clauses of the approved Resolution Plan filed
the Company Appeal before the NCLAT, just to delay the
implementation of the Plan.
77. Even after the impugned judgment was passed by the
NCLAT, allowing the said untenable Appeal of JSW and
dismissing the other Appeals of the Operational Creditors
and the Ex-Promoters, the Resolution Plan was not
implemented by JSW under the guise of pendency of the
present Appeals, though there was no stay granted by this
Court against the implementation of the Resolution Plan.
On the contrary a statement was made by Dr. Singhvi
appearing for the CoC, as recorded in the order dated
06.03.2020, to the effect that “in case he receives money
he will return the said amount within two months, if the
appeal succeeds.” Again, pending these Appeals, with a
view to delay the implementation of the Resolution Plan,
JSW filed an IA being No. 47947/2020 in SLP(C) No.
29327-29328/2019 (Civil Appeal Nos.14503-14504 of
2004), which were tagged along with the present Appeals,
attempting to seek a stay on the implementation of plan
under the garb of seeking clarification of the court’s order
dated 06.03.2020, stating inter alia that JSW was not
obligated to implement the Resolution Plan during the
pendency of the Appeals filed by the Appellants herein.

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 Thus, all throughout the proceedings, the plan was not
implemented by JSW without any cogent reason or
justification for about two and a half years after the
approval granted by the NCLT and for about two years after
the impugned order was passed by the NCLAT, leaving the
creditors in lurch and leaving them high and dry.
78. Now, a situation of fait accompli is sought to be presented
before this Court by the learned Senior Advocate Mr.
Neeraj Kishan Kaul appearing for JSW by submitting that
pending the present Appeals, the Resolution Plan has
been fully implemented. In our opinion, nobody should be
permitted to misuse the Process of law nor should be
permitted to take undue advantage of the pendency of any
proceedings in any Court or Tribunal. Instituting vexatious
and frivolous litigations in the NCLT or NCLAT and
delaying the implementation of Resolution Plan under the
garb of pendency of proceedings, has clearly proved the
mala fide and dishonest intention on the part of JSW, in
firstly securing highest score making misrepresentation
before CoC and then not implementing the same under the
garb of pendency of proceedings, though the Resolution
Plan was supposed to be an unconditional one. Such acts
of misuse and abuse of process of law cannot be
vindicated by this Court, which otherwise would

CIVIL APPEAL NO.1808 OF 2020 Page 95 of 105

 tantamount to ratifying and pardoning the illegal acts
committed by JSW and thereby giving them a clean chit.
79. An illegality of any nature cannot be permitted to be
perpetuated, and a plea of fait accompli cannot be
permitted to be raised by any party to cover up their illegal
acts, after achieving the ill motivated intentions
circumventing the law. As demonstrated earlier, there was
an entire spectrum of lacunas and flaws in the Resolution
Plan of JSW with regard to non-compliance of the
mandatory requirements under the IBC. The Resolution
Plan as approved by the CoC was an unconditional plan,
and JSW was supposed to implement the same regardless
of any unprecedented challenges or circumstances. JSW
cannot treat the plan as conditional or optional, nor can it
abdicate its responsibilities on the ground of unforeseen
obstacles. It is pertinent to note that though all throughout
from the date of order passed by the NCLT till March, 2021,
the stand of the JSW evidenced through an affidavit was
that it was not obliged to implement the plan because of
the pendency of these Appeals, however JSW played
smart by making part payment to the Financial Creditors in
March, 2021, realizing the beneficial market trend of the
Steel. It also surreptitiously got the Effective date extended
to 31.03.2021 from the so-called core group of CoC, which

CIVIL APPEAL NO.1808 OF 2020 Page 96 of 105

 had already become functus officio and which had no
authority to extend the said Effective date. The net result is
that the upfront payments as agreed to be made in the
Resolution Plan within thirty days of the approval of the
plan by NCLT was delayed by 540 days in respect of
payment to the Financial Creditors and by 900 days in
respect of payment to the Operational Creditors. The
Equity commitment as per clause 2.3 of the Resolution
Plan with regard to the infusion of Equity into the Company
for an amount aggregating INR 8,550 crores, to be infused
upfront on the Effective date, was also not complied with
by JSW.
80. It is very pertinent to note that the upfront payments and
commitment with regard to infusion of Equity into the
company was one of the main criteria on which JSW had
scored the highest in the evaluation matrix determined by
the CoC. Thus, after obtaining the approval of its
Resolution Plan from CoC by presenting a rosy picture,
misguiding the CoC, and defeating the rights of other
Resolution Applicants, JSW did not respect and honor the
said commitments, and on the contrary tried its level best
to delay the implementation of the Resolution Plan without
any cogent reason or justification. This is nothing but a

CIVIL APPEAL NO.1808 OF 2020 Page 97 of 105

 misuse of process of law and a fraud committed by JSW
with the CoC and other stakeholders.
81. Recently, this Court in State Bank of India and Others
Vs. Consortium of Murari Lal Jalan and Florian Fritsch
and Another14, has made very apt observations, with
regard to the delaying tactics adopted by the Successful
Resolution Applicant in implementing the Plan, and the
NCLT and NCLAT adopting casual approach in exercising
discretion in granting extension of the timelines fixed under
the Code. The Court while directing the Corporate Debtor
to be taken into liquidation, observed thus: -
“173. This litigation is an eye-opener also as regards
the manner in which the implementation of plans are
handled by the successful resolution applicant and the
lenders involved in the process. Once a resolution plan
is approved under the Insolvency and Bankruptcy
Code, 2016 the successful resolution applicant
undertakes a profound responsibility to implement the
plan in both letter and spirit. This obligation is not
merely an empty formality but an enduring commitment
to restore the corporate debtor to viability and ensure a
meaningful turnaround. The role of the successful
resolution applicant is thus far more than a
transactional duty towards the creditors or
stakeholders; it embodies a pivotal responsibility to the
distressed entity itself, which must be approached with
utmost dedication and an earnest sense of duty.
Regardless of the challenges that may arise, the
successful resolution applicant cannot treat its
obligations as optional or conditional, nor can it
abdicate its responsibility in the face of unforeseen
obstacles. Its efforts must reflect a determination to

14 (2024) SCC OnLine 3187

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 implement the plan fully and to rejuvenate the debtor
company, as this is integral to the success of the
Insolvency and Bankruptcy Code, 2016 framework and
the spirit of economic revival it seeks to foster. The
approach, therefore, must not be frugal or narrowly
profit-driven, limited to viewing the transaction through
a purely commercial lens. Instead, it must recognise
that rescuing a distressed company is a responsibility
of significant social and economic value, demanding a
holistic and responsible strategy. This involves a
dedication to long-term outcomes, where the
successful resolution applicant adopts measures that
genuinely support the debtor's rehabilitation, rather
than making minimal or half-hearted attempts at
implementation. The courts and Tribunals have
consistently underscored that the successful resolution
applicant's role transcends commercial interest and
embodies a commitment to the larger purpose of
corporate revival. Consequently, it must make
thoughtful and sustained efforts, demonstrating
adaptability and resilience even when faced with
obstacles or operational impediments. Simply put, the
successful resolution applicant cannot step back or
dismiss its obligations by attributing delays or setbacks
to the conduct of other stakeholders, as this would
undermine the very purpose of insolvency resolution.
174-175………………………
176. The Insolvency and Bankruptcy Code, 2016 is
silent as regards the phase of implementation of the
resolution plan by the successful resolution applicant.
This is mostly due to the fact that each resolution plan
might be unique and customized to the specific needs
of the corporate debtor and an excessive amount of
statutory control over the implementation of the plan
may prove to be counterproductive to the cause of the
corporate debtor. However, this has unfortunately led
to the consequence of giving excessive leeway to the
successful resolution applicants to act in flagrant
violation of the terms of the resolution plan in a
lackadaisical manner. The successful resolution
applicants repeatedly approach the Adjudicating
Authority or the National Company Law Appellate

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 Tribunal for the grant of reliefs in relation to relaxation
of the strict compliance to the terms of the plan,
including the timelines imposed therein. The National
Company Law Tribunal and National Company Law
Appellate Tribunal more often than not, accede to such
requests in exercise of their inherent powers under rule
11 or their power to extend time under rule 15 of the
National Company Law Tribunal and National
Company Law Appellate Tribunal Rules, 2016
respectively. It is reiterated that the National Company
Law Tribunal and National Company Law Appellate
Tribunal must not entertain such repeated attempts at
violating the integrity of a committee of creditors
approved resolution plan by accommodating the
incessant requests of the successful resolution
applicants. The exercise of discretion as regards
altering the binding terms of the resolution plan,
including the timelines imposed, must be kept at a
minimum, at best. The National Company Law
Tribunals/National Company Law Appellate Tribunals
need to be sensitized of not exercising their judicial
discretion in extending the timelines fixed under the
Insolvency and Bankruptcy Code, 2016 or the
resolution plan, in such a way that it may make the
Code lose its effectiveness thereby rendering it
obsolete.”

82. Thus, it is quite clear that merely because the Code is silent
with regard to the phase of implementation of the
Resolution Plan by the Successful Resolution Applicant,
neither the Tribunal nor the Courts should give excessive
leeway to the Successful Resolution Applicant to act in
flagrant violation of the terms of the Resolution Plan or in a
lackadaisical manner. In the instant case, SRA/JSW did
not implement the Resolution Plan for about two years

CIVIL APPEAL NO.1808 OF 2020 Page 100 of 105

 since its approval by the NCLAT, though there was no legal
impediment in implementing the same. Such flagrant
violation of the terms of the Resolution Plan, has frustrated
the very object and purpose of the Code. It is needless to
say that the Resolution Plan, after its approval by the
Adjudicating Authority i.e. NCLT under Section 31, is
binding not only to the Corporate Debtor, its employees,
members, creditors and the Government authorities but
also to all the stakeholders including the successful
Resolution Applicant itself. It may be noted that any
contravention of the terms of the approved Resolution
Plan, by any person on whom such plan is binding under
Section 31, is liable to be prosecuted and punished under
sub-section (3) of Section 74 of the IBC. It is also further
required to be noted that in view of Section 33, where the
Adjudicating Authority, before the expiry of the insolvency
resolution process period or the maximum period permitted
for completion of corporate insolvency resolution process
under Section 12, does not receive a Resolution Plan
under Sub-section (6) of Section 30; or rejects the
Resolution Plan under Section 31 for the non-compliance
of the requirements specified therein, it has to pass an
order requiring the Corporate Debtor to be liquidated in the
manner as laid down in Chapter III of the IBC.

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83. Having thoroughly examined the entire matter factually and
legally, we arrive at the following irresistible conclusions: -
(i) The Resolution Professional had utterly failed to
discharge his statutory duties contemplated under
the IBC and the CIRP Regulations during the course
of entire CIR proceedings of the Corporate Debtor-
BPSL.
(ii) The CoC had failed to exercise its commercial
wisdom while approving the Resolution Plan of the
JSW, which was in absolute contravention of the
mandatory provisions of IBC and CIRP Regulations.
The CoC also had failed to protect the interest of the
Creditors by taking contradictory stands before this
Court, and accepting the payments from JSW without
any demurer, and supporting JSW to implement its
ill-motivated plan against the interest of the creditors.
(iii) The SRA-JSW after securing the highest score in the
Evaluation matrix in the 18th meeting of CoC,
submitted the revised consolidated Resolution Plan
with addendum under the garb of complying with the
amendments made in the CIRP Regulations, 2016,
and got the same approved from the CoC. However,
JSW even after the approval of its Plan by the
NCLAT, willfully contravened and not complied with

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 the terms of the said approved Resolution Plan for a
period of about two years, which had frustrated the
very object and purpose of the IBC, and
consequently had vitiated the CIR proceedings of the
Corporate Debtor-BPSL.
(iv) The Resolution Plan of JSW as approved by the CoC
did not confirm the requirements referred to in sub-
section (2) of Section 30, the same being in flagrant
violation and contravention of the expressed
provisions of the IBC and the CIRP Regulations. The
said Resolution Plan therefore was liable to be
rejected by the NCLT under sub-section (2) of
Section 31, at the very first instance.
(v) The impugned judgment passed by the NCLAT in
allowing the Company Appeal of JSW and issuing
the directions without any authority of law and without
jurisdiction is perverse, coram non judice and liable
to be set aside.
84. In that view of the matter, following order is passed: -

(i) The judgments and orders dated 05.09.2019 and

17.02.2020 passed by the NCLT and NCLAT
respectively are quashed and set aside.
(ii) The Resolution Plan of JSW as approved by the CoC
stands rejected, being not in conformity with the

CIVIL APPEAL NO.1808 OF 2020 Page 103 of 105

 provisions contained in sub-section (2) of Section 30,
read with sub-section (2) of Section 31.
(iii) In view of the provisions contained in sub-section (1)
of Section 33, and in exercise of the jurisdiction
conferred under Article 142 of the Constitution of
India, the Adjudicating Authority i.e. the NCLT is
directed to initiate the Liquidation Proceedings
against the Corporate Debtor-BPSL under Chapter
III of the IBC and in accordance with law.
(iv) The payments made by the JSW to the Financial
Creditors and the Operational Creditors, as also the
Equity contribution if any infused, under the garb of
the implementation of the Resolution Plan, being
subject to the outcome of the present set of Appeals,
shall be dealt with by the parties as per the statement
of Senior Advocate Dr. Abhishek Manu Singhvi
appearing for the CoC, recorded in the order dated
06.03.2020.
(v) Since, we have rejected the Resolution Plan of JSW,
we have not dealt with the issue of the EBITDA
though raised and argued by the Learned Advocates
for the parties. The question of law with regard to
EBITDA is kept open.

CIVIL APPEAL NO.1808 OF 2020 Page 104 of 105

85. The Civil Appeal No. 1808 of 2020 (Kalyani Transco vs. M/s.
Bhushan Power and Steel Limited & Ors), Civil Appeal Nos.
2192-2193 of 2020 (Sanjay Singhal & Anr vs. Punjab National
Bank & Ors, Etc.), Civil Appeal No. 2225 of 2020 (Jaldhi
Overseas Pte. Ltd. vs. Mahender Kumar Khandelwal & Ors),
Civil Appeal No. 3020 of 2020 (M/s. Medi Carrier Pvt. Ltd. vs.
Mahendra Kumar Khandelwal & Anr) and Civil Appeal No. 6390
of 2021 (CJ Darcl Logistics Ltd. vs. Mahendra Kumar
Khandelwal & Anr) stand allowed to the aforesaid extent.
86. Since, we have rejected the Resolution Plan of JSW, we do not
express any opinion on the merits of the claims of the State of
Odisha in respect of its Electricity dues and Entry tax dues. The
Civil Appeal No. 3784 of 2020 (Government of Odisha & Ors
vs. M/s. Bhushan Power and Steel Limited & Ors) and 668 of
2021 (State of Odisha vs. M/s. Bhushan Power and Steel
Limited & Ors) stand disposed of accordingly.
87. Pending application(s), if any, shall also stand disposed of.

...…………………………………J
[BELA M. TRIVEDI]

..…………………………………..J
[SATISH CHANDRA SHARMA]
NEW DELHI;
MAY 02nd, 2025

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