Informist, Thursday, Aug. 7, 2025

NEW DELHI – The lenders of debt-ridden Bhushan Power & Steel Ltd. said in the Supreme Court Thursday that they should be paid interest by the successful resolution applicant JSW Steel Ltd. for the period of delay in implementation of the resolution plan. Further, the lenders argued that earnings before interest, taxes, depreciation, and amortisation generated during the insolvency process of Bhushan Power must flow to the creditors.

The implementation of the Bhushan Power resolution plan by JSW Steel was significantly delayed, with the payments to financial creditors delayed by 540 days and operational creditors by over 900 days beyond the initially approved timeline.

The Supreme Court had last week recalled its May 2 verdict rejecting JSW Steel's INR 193.50-billion resolution plan for Bhushan Power and directing the latter's liquidation. The bench led by Chief Justice B.R. Gavai had allowed the review pleas filed by JSW Steel and Bhushan Power's lenders, including State Bank of India and Punjab National Bank. The apex court on Thursday started hearing afresh the pleas by operational creditor Kalyani Transco, former promoter Sanjay Singhal and others challenging JSW Steel's resolution plan for the debt-ridden company.

Advocate Dhruv Mehta, appearing for Singhal, argued that JSW Steel, while submitting its resolution plan, had failed to bring in equity infusion, which had been committed under the plan. Mehta also contended that post-approval, the committee of creditors had no authority to permit modifications to the resolution plan, as there was no express provision for the same under the Insolvency and Bankruptcy Code, 2016. Mehta sought that the resolution plan of JSW Steel should be set aside and fresh applications be invited again for the company.

The National Company Law Tribunal had started insolvency proceedings against Bhushan Power on a petition by Punjab National Bank in 2017 and approved the resolution plan submitted by JSW Steel in 2019. On May 2, the Supreme Court had set aside JSW Steel's resolution plan for Bhushan Power on a petition by operational creditor Kalyani Transco. Terming JSW Steel's resolution plan as illegal, the top court said it should not have been accepted by the committee of creditors of the debt-ridden company and directed the company's liquidation.

The committee of creditors had failed to exercise its commercial wisdom by approving the resolution plan of JSW Steel, which was in contravention of the mandatory provisions of the 2016 code, the top court had said in its order in May. The committee of creditors had also failed to protect the interests of creditors by taking contradictory stands before the court and accepting the payment from JSW Steel without any measure and supporting the latter to implement its motivated plan against the interest of creditors, the court had said.

On Thursday, shares of JSW Steel ended 1.2% higher at INR 1,064.80 on the National Stock Exchange. Shares of Punjab National Bank ended 0.8% higher at INR 104.69 and shares of State Bank of India ended flat at INR 805.15. End

Reported by Surya Tripathi

Edited by Saji George Titus

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