In a major setback for JSW Steel, the Supreme Court on Friday rejected its resolution plan for Bhushan Power and Steel Ltd (BPSL), ordering the liquidation of the debt-ridden steelmaker. The apex court found the resolution plan to be illegal and unfit for approval under the Insolvency and Bankruptcy Code (IBC), 2016.
A Bench led by Justice Bela M. Trivedi strongly criticised the conduct of JSW Steel, the Committee of Creditors (CoC), and the Resolution Professional (RP), stating that they collectively attempted to “sweep many seminal issues under the carpet” in a bid to cover up serious violations of the Code during both the pre-approval and post-approval stages of the resolution process.
The court held that JSW Steel acted with “malafide and dishonest” intent by exploiting the ongoing Enforcement Directorate (ED) proceedings against BPSL to delay the implementation of the resolution plan for over two years. The Bench observed that this deliberate inaction frustrated the core objectives of the IBC, which aims for timely resolution of stressed assets.
The judgment noted that JSW Steel misrepresented facts before the court to secure the highest bid score, and thereafter failed to implement the plan, citing ED proceedings as a pretext. The court also found grave lapses on the part of the Resolution Professional, who it said failed in fulfilling his statutory responsibilities under the IBC.
Case Details
Case Title: KALYANI TRANSCO v/s M/S.BHUSHAN POWER AND STEEL LTD. & ORS.
Citation: CIVIL APPEAL NO. 1808 of 2020
