The Supreme Court adjudicated on the validity of the National Company Law Appellate Tribunal’s approval of JSW’s resolution plan under the Insolvency and Bankruptcy Code, 2016. It addressed procedural compliance under Sections 29A, 30, and 61, overreach by NCLAT in modifying NCLT’s order, and jurisdictional limits concerning ED’s attachment powers under PMLA.
Facts Of The Case:
The insolvency resolution process for Bhushan Power and Steel Ltd. (BPSL) commenced on a petition filed by Punjab National Bank, admitted by NCLT on July 26, 2017. Interim Resolution Professionals invited claims, with financial creditors claiming over ₹47,000 crores and operational creditors over ₹600 crores. JSW Steel emerged as the successful resolution applicant after a multi-stage bid evaluation by the Committee of Creditors (CoC). JSW submitted a consolidated plan in October 2018. However, during the approval process, the Enforcement Directorate (ED) attached BPSL’s assets under PMLA based on criminal proceedings against its former directors. The NCLT approved JSW’s plan with specific conditions in September 2019.
JSW appealed against certain conditions; various other creditors and the State of Odisha also appealed. The NCLAT modified the NCLT order in favor of JSW and dismissed all other appeals. Issues arose concerning compliance with Section 29A of the IBC and NCLAT’s jurisdiction over ED’s attachment under PMLA. The ED, JSW, and CoC also approached the Supreme Court, which had to address maintainability, statutory compliance, and judicial overreach.
Procedural History:
The matter began with the NCLT’s admission of insolvency proceedings against BPSL in July 2017. The resolution plan submitted by JSW was approved by the CoC and later by the NCLT in September 2019 with specific conditions. JSW challenged these conditions in NCLAT, which allowed its appeal and modified the conditions while dismissing appeals by operational creditors, promoters, and the State of Odisha. JSW’s appeal lacked statutory grounds under Section 61(3), yet NCLAT entertained it. ED’s attachment under PMLA was also stayed by NCLAT, despite lacking jurisdiction. The CoC and ED filed civil appeals before the Supreme Court, culminating in a Supreme Court ruling in December 2024 that clarified implementation while reserving the right to determine unresolved legal issues.
Court Observation:
The Supreme Court observed that NCLAT overstepped its jurisdiction by entertaining JSW’s appeal without statutory grounds under Section 61(3) of IBC. The Court noted that NCLAT improperly modified NCLT’s approved resolution plan and commented on matters beyond the scope of appeal, including declassification of promoters and suppression of material facts by JSW. The Court expressed concern over the lack of a proper compliance certificate under Regulation 39(4) and the questionable eligibility under Section 29A. It emphasized that NCLT/NCLAT cannot exercise judicial review over decisions by statutory authorities under PMLA, reaffirming limits to their jurisdiction.
Final Decision & Judgement:
The Supreme Court set aside the NCLAT’s modifications of NCLT’s order and held that JSW’s appeal before NCLAT was not maintainable. It ruled that NCLT’s approval conditions could not be altered without legal basis and found that NCLAT exceeded its powers in declaring ED’s attachment illegal. However, considering peculiar facts, the Court allowed JSW to take control of the attached assets without prejudicing ED’s ongoing investigations. The ruling reinstated procedural rigor under the IBC and clarified the limited jurisdiction of insolvency forums.
Case Details:
Case Title: Kalyani Transco v. M/s Bhushan Power and Steel Ltd. & Ors. Citation: 2025 INSC 621 Appeal No.: Civil Appeal No. 1808 of 2020 (with connected appeals) Date of Judgment: 11 December 2024 (final disposition in SC) Judges: Hon’ble Justice Bela M. Trivedi
Download The Judgement Here