Kalyani Transco vs. M/S Bhushan Power And Steel Ltd.

REPORTABLE
2025 INSC 1165


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 LIMITED AND OTHERS …RESPONDENTS


WITH


CIVIL APPEAL NOS. 2192-2193 OF 2020
CIVIL APPEAL NO. 2225 OF 2020
CIVIL APPEAL NO. 3020 OF 2020
CIVIL APPEAL NO. 6390 OF 2021


Signature Not Verified
Digitally signed by
NARENDRA PRASAD
Date: 2025.09.26
11:29:13 IST
Reason:
1


INDEX


I. INTRODUCTION.................................................................... 4
II. FACTS .................................................................................. 4
III. SUBMISSIONS .................................................................... 15
i. Appellants in Civil Appeal Nos. 2192 – 2193 of 2020
(erstwhile promoters) ............................................................... 16
ii. Appellants in Civil Appeal No. 2225 of 2020 (Jaldhi
Overseas Pte. Limited) .............................................................. 23
iii. Appellants in Civil Appeal No. 3020 of 2020 (M/s. Medi
Carrier Private Limited) and Civil Appeal No. 6390 of 2021 (CJ
Darcl Logistics Limited) ........................................................... 24
iv. Resolved Entity – BPSL ...................................................... 25
v. Resolution Professional ..................................................... 26
vi. Committee of Creditors ...................................................... 27
vii. Successful Resolution Applicant – JSW ........................... 30
viii. Submissions in Rejoinder ................................................ 38
IV. ANALYSIS ........................................................................... 39
a. Locus standi of the erstwhile promoters ......................... 39

c. Grounds of Appeal .......................................................... 68
d. Legality of clause permitting CoC to extend the period for
implementation of the Resolution Plan ................................. 74
e. Delay in implementation of the Resolution Plan ............. 78
f. Contravention of law ...................................................... 95
g. Upfront infusion of funds by the SRA – JSW ................. 100
h. Distribution of EBITDA.................................................. 107
i. Contingent claim of Jaldhi ........................................... 121
j. Pre-CIRP dues of Medi and Darcl ................................... 131
V. CONCLUSION ................................................................... 133




2


LIST OF ABBREVIATIONS

3


J U D G M E N T

B.R. GAVAI, CJI

I. INTRODUCTION
1. This batch of six appeals are filed under Section 62
1
of the Insolvency and Bankruptcy Code, 2016 by erstwhile
promoters and various Operational Creditors of the Corporate
Debtor against the common final impugned judgment and
th
order dated 17 February 2020 passed by the National
2
Company Law Appellate Tribunal, New Delhi in relation to the
3
Corporate Insolvency Resolution Proceedings of M/s
4
Bhushan Power and Steel Limited.
II. FACTS
2. The relevant facts which give rise to these appeals
are:
2.1. The Banking Regulation Act, 1949 was amended
th 5
w.e.f. 4 May 2017 to the effect that the Reserve Bank of India
was empowered to issue directions to the Indian Banks to
initiate CIRP against major corporate defaulters.

1
“IBC” or “the Code” for short.
2
“NCLAT” for short.
3
“CIRP” for short.
4
“BPSL” for short.
5
“RBI” for short.
4


th
2.2. The RBI, vide circular dated 13 June 2017,
identified 12 large scale corporate defaulters, with outstanding
debts valued at Rs. 5,000 crore and above, now infamously
known as the “dirty dozen”. The Corporate Debtor – BPSL was
one of the defaulters identified by the RBI.
2.3. The Respondent No. 5 in the lead matter (Punjab
National Bank) filed Company Petition C.P. No. (IB)-202 (PB)
of 2017 under Section 7 of the IBC before the NCLT, which
th
was admitted vide order dated 26 July 2017 and the CIRP
commenced.

2.4. After the imposition of moratorium , the Interim
6 th
Resolution Professional on 28 July 2017 invited claims from
all the creditors and stakeholders. A huge number of claims
7
were raised by the stakeholders. For the Financial Creditors ,
the IRP admitted claims of Rs. 4,72,04,51,78,073.88/- (Forty-
Seven Thousand Two Hundred and Four Crores Fifty-One
Lakhs Seventy-Eight Thousand and Seventy-Three) and on the
other hand for the Operational Creditors , claims of
Rs.6,21,37,61,735/- (Six hundred and Twenty-one Crores

6
“IRP” for short.
7
“FC” for short.
5


Thirty-Seven Lakhs Sixty-One Thousand Seven hundred and
thirty-five) were admitted.
2.5. During the First Meeting of the Committee of
8 st
Creditors dated 1 September 2017, the IRP was confirmed
9
as the Resolution Professional . Pursuant to an advertisement
st
published by the RP on 21 September 2017, thirteen
10
Potential Resolution Applicants including Respondent No. 2
in the lead matter (JSW Steel Ltd. ) submitted their Resolution
Plan to the RP.
th th
2.6. In the 18 Meeting of the CoC dated 14 August
2018, the Resolution Plans were evaluated by the CoC and the
plan submitted by JSW Steel Ltd. emerged as the highest
evaluated plan based on the evaluation matrix formulated in
accordance with the Code and the relevant regulations. The
scores of every PRA were submitted to the NCLAT in a sealed
cover. Negotiations were held with JSW Steel Ltd. and based
on the said negotiations and discussions, a Consolidated

8
“CoC” for short.
9
“RP” for short.
10
“PRA” for short.
6


11 rd
Resolution Plan was submitted by JSW Steel Ltd. on 3
October 2018.
th
2.7. On 7 October 2018, the RP called for a meeting of
the CoC for consideration and approval of the CRP. In the CoC
th
meeting held on 10 October 2018, the CRP submitted by JSW
Steel Ltd. was considered, and further negotiations took place
regarding the modifications to bring the CRP in compliance
with the amended Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons)
12
Regulations, 2016 . Pursuant to the negotiations, JSW Steel
th
Ltd. submitted the addendum letter dated 10 October 2018
whereby it amended and clarified certain terms of the CRP to
ensure compliance with the amended regulations.
2.8. After confirmation by the RP vide communication
th
dated 14 October 2018, to all the members of the CoC that
the CRP was in compliance with statutory requirements with
the Section 30(4) of the Code, the CoC approved the same by
the requisite majority and JSW Steel Ltd. was declared as the
SRA and which we shall refer to as SRA – JSW hereinafter.

11
“CRP” for short.
12
“IBBI (CIRP) Regulations” for short.
7


th
2.9. As per the communication dated 5 February 2018
by the RP, the SRA – JSW issued the Proposal Performance
th
Guarantee for an amount of Rs. 100 crore on 11 February

2019 and it was issued a Letter of Intent by the RP.
2.10. Thereafter, the RP filed the Company Application No.
th
254 (PB)/2019 in C.P. No. (IB)-202 (PB) of 2017 on 14
February 2019 as per the mandate of Sections 30(6) and 31(1)
of the IBC, read with Regulation 39(4) of the IBBI (CIRP)
Regulations with a prayer to accept the Resolution Plan
submitted by the SRA – JSW which had been duly approved
by the CoC.
2.11. During the pendency of the aforesaid proceedings,
13
the Central Bureau of Investigation registered a First
14
Information Report being No. RCBD1/2019/E/0002 against
the Corporate Debtor – BPSL and its directors and other
related parties under Sections 420, 468, 471 and 477A read
15
with Section 120B of the Indian Penal Code, 1860 and
Section 13(2) read with Section 13(1)(d) of the Prevention of

13
“CBI” for short.
14
“FIR” for short.
15
“IPC” for short.
8


16
Corruption Act, 1988 . Based on the said FIR, the Directorate
17
of Enforcement , registered a case bearing No. ECIR/DLZO–
th
I/02/2019 on 25 April 2019 for offences punishable under
18

the Prevention of Money Laundering Act, 2002 .
2.12. Various applications raising objections were filed in
the proceedings pending before the NCLT by the erstwhile
promoters and some OCs of the Corporate Debtor – BPSL. The
th
NCLT, vide common Judgment and Order dated 5 September
2019, dismissed the said applications and approved the
Resolution Plan of the SRA – JSW subject to certain
conditions.
2.13. Being aggrieved by some of the conditions imposed
by the NCLT, the SRA – JSW filed Company Appeal No. 957 of
2019 under Section 61 of the IBC before the NCLAT.
2.14. Meanwhile, the ED passed a Provisional Attachment
19 th
Order being No. 11 of 2019 dated 10 October 2019 and
provisionally attached the assets of the Corporate Debtor –
BPSL under Section 5 of the PMLA.

16
“PC Act” for short.
17
“ED” for short.
18
“PMLA” for short.
19
“PAO” for short.
9


2.15. Being aggrieved, the PAO was challenged by the SRA
– JSW before the NCLAT by way of a separate application in
th
the pending company appeal. Vide interim order dated 14
October 2019, the NCLAT stayed the implementation
Resolution Plan as well as the PAO.
2.16. The CoC also challenged the said PAO before this
Court by filing SLP (C) Nos. 29327 – 29328 of 2019. Vide order
th
dated 18 December 2019, this Court issued notice and
stayed the PAO.
2.17. Meanwhile, various other stakeholders filed appeals
before the NCLAT challenging the final approval order of the
th
NCLT dated 5 September 2019.
2.18. The NCLAT vide common impugned judgment dated
th
17 February 2020 allowed the appeal filed by SRA – JSW and
modified some of the conditions that had been imposed by the
NCLT in the approval order and dismissed the appeals filed by
all the appellants herein challenging the approval order.

2.19. Being aggrieved by the common impugned judgment
th
of the NCLAT dated 17 February 2020, these appeals have
been filed.
10


2.20. A Civil Appeal No. 3362 of 2020 was filed by ED
th
challenging the common Impugned Judgment dated 17
February 2020 passed by the NCLAT. The said appeal by the
ED as well as the SLPs filed by the CoC were heard along with
the present batch of appeals.
th
2.21. Vide order dated 6 March 2020, this Court
admitted the appeals and recorded the statement of the
learned Senior Counsel appearing on behalf of the CoC that
the CoC would return the amount received by it from the SRA
– JSW in case the appeals succeed.
th

2.22. Vide order dated 11 December 2024, this Court
disposed of Civil Appeal Nos. 14503 – 14504 of 2024 (arising
out of SLP (C) Nos. 29327 – 29328 of 2019) filed by the CoC
challenging the ED’s PAO and Civil Appeal No. 3362 of 2020
filed by the ED based on the affidavit filed by Mr. Dipin Goel,
Deputy Director, Directorate of Enforcement, New Delhi. It was
stated in the affidavit that Section 32A of the IBC was inserted
th
w.e.f. 28 December 2019 and it did not have retrospective
effect and hence, in view of the peculiar facts and
circumstances, the SRA – JSW be permitted to take control of
the attached properties treating the same as restitution under
11


Section 8(8) of the PMLA read with Rule 3A of the Prevention
of Money Laundering (Restoration of Property) Rules, 2016.
This Court, therefore, directed the ED to handover the control
of the properties of the Corporate Debtor – BPSL to the SRA –
JSW. However, it was clarified that this Court had not
expressed any opinion on the interpretation of Section 32A of
the IBC or on the powers of the ED to attach the property of
the Corporate Debtor – BPSL which is undergoing CIRP.
2.23. The remaining appeals, forming the present batch,
were heard at length on various dates and this Court vide
nd
common final judgment and order dated 2 May 2025
th
quashed and set aside the judgments and orders dated 5
th
September 2019 and 17 February 2020 passed by the NCLT
and NCLAT respectively. This Court issued the following
directions vide the said final judgment and order:
“ 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 provisions contained in
12


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.
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
13


Khandelwal & Anr) and Civil Appeal No. 6390 of
2021 (CJ Darcl Logistics Ltd. vs. Mahendra Kumar
Khandelwal & Anr) stand allowed to the aforesaid
extent.”

2.24. Being aggrieved, Review Petitions bearing RP (C) No.
1432 of 2025 and connected matters came to be filed by the
aggrieved parties seeking recall of the final judgment and order
nd
dated 2 May 2025.
th
2.25. Vide order dated 29 July 2025, notice was issued
in the Review Petitions and the applications for hearing the
review petitions in open court were allowed.
st
2.26. On the next date of hearing, i.e. 31 July 2025, the
following order was passed:
“ 3. We are of the view that the common impugned
judgment and order dated 02.05.2025 does not
correctly consider the legal position as laid down
by a catena of judgments, including the following:
……………
7. We, therefore, find that this is a fit case for
recalling the judgment under review and
reconsidering the matter afresh.
8. Having considered the submissions advanced
by the learned senior counsel for the parties, we
find that there is/are error(s) apparent on the face
of the record warranting exercise of review
jurisdiction vested in this Court.
9. Accordingly, the impugned judgment and order
dated 02.05.2025 is recalled. The review petitions
are allowed.
14


10. Needless to state that though we are allowing
these review petition(s), all questions of law shall
remain open for both parties to argue at the stage
of final hearing.
……….”

2.27. While allowing the Review Petitions, all the questions
of law were kept open, as a result of which this batch of
th
appeals were listed for final hearing on 7 August 2025. On
th
11 August 2025, this Court upon conclusion of the
arguments reserved judgment.
III. SUBMISSIONS
3. We have extensively heard Shri Dhruv Mehta and
Shri Balbir Singh, learned Senior Counsel, Shri Arjun Asthana
and Shri Manu Beri, learned Counsel appearing for the
appellants . We have heard Shri Navin Pahwa, learned Senior
Counsel appearing for the Resolution Professional. We have
heard Shri Pinaki Misra, learned Senior Counsel appearing for
the Resolved Entity, i.e. BPSL. We have heard Shri Tushar
Mehta, learned Solicitor General appearing on behalf of the
CoC. We have also heard Shri Neeraj Kishan Kaul and Shri
Gopal Jain, learned Senior Counsel appearing for the SRA –
JSW.
15


i. Appellants in Civil Appeal Nos. 2192 – 2193 of
2020 (erstwhile promoters)
4. Before we proceed to record the submissions of the
learned counsel for the parties on merits, it will be relevant to
note that Shri Tushar Mehta, learned Solicitor General
appearing on behalf of the CoC and Shri Kaul, learned Senior
Counsel appearing on behalf of the SRA – JSW have raised
objections with regard to the very tenability of the appeals at
the behest of the erstwhile promoters-cum-directors.
5. Shri Dhruv Mehta, learned Senior Counsel for the
Appellants – erstwhile promoters, submitted that the
promoters were personal guarantors of the Corporate Debtor
and hence fall within the ambit of “persons aggrieved” under
Section 61 of the IBC. It is submitted that personal insolvency
proceedings have been initiated against them, which gives
them a clear to file the present appeals.
locus
6. It was further submitted by Shri Dhruv Mehta that
the question of locus is no longer res integra . Reliance was
placed on paragraph 19.4 of Vijay Kumar Jain v. Standard
20
Chartered Bank and Others , to submit that personal

20
(2019) 20 SCC 455
16


guarantors were held by this Court to be persons interested in
the Resolution Plan and were therefore included in the
“persons aggrieved” as per the IBC. Reference was also made
to paragraph 21 of the said judgment regarding the rights of
the erstwhile Board of Directors. He further relied on
paragraphs 74 and 75 of Glas Trust Company LLC v. Byju
21
Raveendran and Others to contend that the term “persons
aggrieved” must be given a broad and purposive interpretation
under Sections 61 and 62 of the IBC and any narrow
construction would frustrate the objective of the Code.

7. It was lastly submitted by Shri Dhruv Mehta on the
issue of locus that the appeals raise pure questions of law
based on undisputed facts and fall squarely within the ambit
of Section 61(3) of the IBC.
8. Shri Dhruv Mehta next raised the issue of
contravention of law by the SRA–JSW, submitting that Clause
3.1 of its Resolution Plan, which allows for an effective change
in the date of implementation, rendered the Plan imprecise
and indeterminate. It was contended that such an open-ended
clause is contrary to the IBC framework and ought not to have

21
2024 SCC OnLine SC 3032
17


been approved by the Adjudicating Authority. It was submitted
that if such open-ended Resolution Plans are permitted, it
would allow creditors to effect post-approval modifications,
thereby undermining the CIRP process.
9. It was further submitted by Shri Dhruv Mehta that
the concept of an “erstwhile CoC” finds no place within the
statutory scheme of the IBC. The Code mandates a strict, time-
bound resolution process, and permitting the CoC to
renegotiate or modify the Plan at the appellate stage would
defeat the legislative intent, unsettle vested rights under the
approved Plan, and delay its implementation.
10. Shri Dhruv Mehta placed reliance on the judgments
of this Court in Ebix Singapore Private Limited v.
Committee of Creditors of Educomp Solutions Limited &
22
Another and Deccan Value Investors L.P. and Another v.
23
Dinkar Venkatasubramanian and Another to submit that
the CoC’s powers are confined to assessing the viability and
feasibility of the Resolution Plan, and cease upon its approval.

22
(2022) 2 SCC 401
23
2024 SCC OnLine SC 4075
18


11. It is further submitted by Shri Dhruv Mehta that the
SRA–JSW violated Section 30(2) of the IBC read with
Regulation 38 of the IBBI (CIRP) Regulations by paying the FCs
before the OCs. The FCs were paid on 26th March 2021,
whereas payments to the OCs were made only thereafter, in
March 2022.
12. Shri Mehta also raised the issue of delay in
implementation of the plan, submitting that though the
th
Resolution Plan was approved on 5 September 2019 and was
to be implemented within 30 days, it was only partially
implemented after 540 days, and the OCs were paid after a
huge delay which exceeded 900 days.
13. Shri Dhruv Mehta submitted that the delay in
implementation of the Resolution Plan by SRA–JSW was
unjustified, as the provisional attachment by the ED was
merely on paper, with no actual possession taken. It is
contended that the SRA–JSW had full control of the assets
throughout since the PAO only referred to land, buildings, and
machinery valued at Rs. 4,025 crore, without any specific
attachment or notice of possession. Reliance is placed on
paragraph 199 of Ebix Singapore Private Limited (supra), to
19


submit that a similar contention of prejudice due to ED
proceedings had already been rejected by this Court.
14. Reliance has also been placed by Shri Dhruv Mehta
State Bank of India and
on the judgment of this Court in
Others v. Consortium of Murari Lal Jalan and Florian
24
Fritsch and Another to submit that it has been held by this
Court that the timely implementation of the Resolution Plan is
necessary.
15. It is further submitted by Shri Dhruv Mehta that the
real cause for delay was the fluctuation in steel prices. Shri
Mehta pointed out that steel prices fell from Rs. 46,000/- per
metric ton in October 2018 to Rs. 35,000/- in September
2019, but rose sharply thereafter, reaching Rs. 55,000/- by
March 2021. It is contended that the SRA–JSW rushed to
implement the plan only when the prices rose and hence the
delay in implementation was not due to the ED proceedings
but was driven by market opportunism, as the timing of
implementation closely tracked steel price trends. It was

24
2024 SCC OnLine SC 3187
20


submitted that the SRA – JSW must pay interest for each day’s
delay in the implementation of the Resolution Plan.
16. Shri Dhruv Mehta then raised the issue of
distribution of Earnings Before Interest, Taxes, Depreciation,
25
and Amortisation . It was submitted that EBITDA represents
the operating profits of the company and is widely recognised
as a key indicator of operational performance. It was
submitted that since the EBITDA is generated from the use of
pre-CIRP funds of the Corporate Debtor and creditor funds, it
forms a part of the company’s assets.

17. It is further submitted by Shri Dhruv Mehta that the
CoC, both before the NCLT and the NCLAT, consistently
maintained that the EBITDA earned during the CIRP was to
be distributed amongst the creditors or the stakeholders that
had infused capital before the infusion of funds by the SRA –
JSW. Thus, in its commercial wisdom, prior to approval of the
Resolution Plan, the CoC had clearly decided against the
EBITDA being retained in the company or being handed over
to the SRA – JSW.

25
“EBITDA” for short.
21


18. Shri Dhruv Mehta further submits that the NCLAT
erred in reversing the NCLT’s direction on the treatment of
EBITDA. It was submitted that the NCLAT failed to appreciate
Committee of Creditors of Essar Steel India
that, unlike
Limited through Authorised Signatory v. Satish Kumar
26
Gupta and Others (hereinafter referred to as “ Supreme
Court Essar ”), the present Resolution Plan contains no
provision on the treatment or distribution of EBITDA, making
the two cases clearly distinguishable.
19. It was submitted by Shri Dhruv Mehta that the SRA
failed to infuse the committed amount of Rs. 26,550 crore,
having infused only Rs. 19,350 crore. This shortfall,
particularly in the Rs. 7,200 crore working capital infusion,
affects the scoring and renders the Plan only partially
implemented. It was further submitted that the SRA – JSW
contends that it issued Compulsorily Convertible
27
Debentures to satisfy the commitment of infusion. However,
neither the CoC nor the SRA – JSW have brought any
documentary evidence on record to show that any actual

26
(2020) 8 SCC 531
27
“CCD” for short.
22


infusion of funds was undertaken by the SRA – JSW. It was
further submitted that the CoC itself had specified that the
infusion must be in the form of pure equity and hence, the
CCDs issued by the SRA – JSW would not be as per the
requirements set by the CoC.
ii. Appellants in Civil Appeal No. 2225 of 2020
(Jaldhi Overseas Pte. Limited)
20. Shri Balbir Singh, learned Senior Counsel for
Appellant–Jaldhi, submitted that Jaldhi’s claims, based on
international arbitral awards, were initially admitted as
Operational Debts but were later reclassified as contingent
debts by the SRA–JSW. He contended that such
reclassification is arbitrary and unjust. Citing various
judgments including Swiss Ribbons Private Limited and
28
Another v. Union of India and Others , India Resurgence
ARC Private Limited v. Amit Metaliks Limited and
29
Another and Supreme Court Essar , it was argued that
Jaldhi must be treated at par with other OCs and paid interest
for the inordinate delay.

28
(2019) 4 SCC 17
29
(2021) 19 SCC 672
23


iii. Appellants in Civil Appeal No. 3020 of 2020 (M/s.
Medi Carrier Private Limited) and Civil Appeal No.
6390 of 2021 (CJ Darcl Logistics Limited)
21. Shri Arjun Asthana, counsel for the Appellant – Medi
submitted that the appeal arises due to the non-payment of
pre-CIRP dues promised by the RP to incentivize Medi to
continue providing its services during CIRP. Medi, engaged
since 2012 for transport services, raised a claim of Rs. 9.51
crore after the CIRP was initiated. It was further submitted
that initially, the Appellant had refused to provide services
during the CIRP period. However, an agreement was entered
into with the RP, whereby Medi was promised 100% of its pre
– CIRP dues so as to incentivise it to provide services during
the CIRP.
22. It was submitted by Shri Asthana that Medi was duly
paid against its pre – CIRP due for about 10 months. However,
in August 2018, it claimed Rs. 7.76 crore for its services
provided during the CIRP. With no response from the RP, Medi
approached the NCLT. It is submitted that thereafter, a
st
corrigendum dated 1 October 2018 stated earlier payments
were wrongly classified by the accounting clerk as pre-CIRP
24


dues and the same were actually to be made against CIRP
services.
23. Shri Asthana further submitted that no bar exists
under the IBC to pay pre-CIRP dues if necessary to keep the
Corporate Debtor a going concern. Sections 14, 20(1), 23(1),
and 25(1) of the IBC impose a duty on the RP to manage
operations and Section 28(1)(k) of the IBC empowers the RP to
transfer operational debts, validating such payments. He
further submitted that barring all pre-CIRP payments would
render the CIRP being marred with irregularities, as many
such payments were admitted by the RP.
24. Shri Manu Beri, counsel for Appellant – Darcl is in a
similar position as the Appellant – Medi and has supported the
submission raised by it.
iv. Resolved Entity – BPSL
25. Shri Pinaki Misra, learned Senior Counsel for the
Resolved Entity (Bhushan Power and Steel Ltd.), submitted
that the company has been successfully revived post-
resolution and supported the submissions of the SRA – JSW.

25


v. Resolution Professional
26. Shri Navin Pahwa, learned Senior Counsel for the
Resolution Professional (RP), submitted that the Resolution
Plan, was in compliance with the IBC and the IBBI (CIRP)
Regulations. Since the liquidation value was nil , payments to
OCs, though ex gratia , were not required to be made in priority
over FCs. He submitted that the relevant amendment to
Regulation 38 of the IBBI (CIRP) Regulations mandating such
th
priority came into force only on 27 November 2019, i.e., after
the NCLT had approved the Resolution Plan, and hence the
Plan remained compliant with the law as it stood then.
27. As regards issues of delay in implementation, equity
infusion, and EBITDA, Shri Pahwa submitted that these were
not pressed against the RP and require no reply.
28. Responding to the contentions raised by Appellant –
Jaldhi, Shri Pahwa submitted that the RP had admitted
Jaldhi’s claim of Rs. 1,51,90,87,933/- as an OC, which was
duly reflected in the list. However, the SRA–JSW reclassified it
as a “Contingent Creditor” due to the pendency of the
proceedings regarding the international arbitral awards before
the Calcutta High Court. He submitted that the RP had no role
26


in this reclassification and was only required to ensure the
Plan’s completeness before placing it before the CoC.
29. Responding to the contentions raised in Appellants –
Medi and Darcl, Shri Pahwa submitted that no pre-CIRP dues
were disbursed by the RP. Payments of Rs. 40.77 crore were
made solely to honour post-dated cheques issued by the
erstwhile management to avoid criminal liability under the
Negotiable Instruments Act, 1881 as the IBC does not protect
against the same. An inadvertent mistake by an accounting
clerk led to the payments being reflected as pre – CIRP
payments, which was later rectified, with revised payment
advisories issued and adjustments made against the CIRP-
period dues. It was submitted that the Appellants – Medi and
Darcl – had provided services during the CIRP period
amounting to ₹ 1,54,82,86,309/- and ₹ 99,99,24,471/-
respectively, against which ₹ 1,54,82,86,309/- and
₹ 96,11,44,066/- had been paid, with the balance payable
under the Resolution Plan.
vi. Committee of Creditors
30. Shri Tushar Mehta, learned Solicitor General
appearing for the CoC, submitted that the erstwhile promoters
27


lacked locus under Sections 61 and 62 of the IBC, having
ceased to have any relationship with the Corporate Debtor
upon initiation of CIRP. He submitted that the grounds raised
by them do not fall within the scope of Section 61(3) of the IBC,
nor do they involve any question of law under Section 62 of
the IBC. He relied on the cases of K. Sashidhar v. Indian
30
Overseas Bank and Others , Kalpraj Dharamshi and
Another v. Kotak Investment Advisors Limited and
31
Another , Ghanshyam Mishra and Sons Private Limited
through the Authorised Signatory v. Edelweiss Asset
Reconstruction Company Limited through the Director
32
and Others and Ngaitlang Dhar v. Panna Pragati
33
Infrastructure Private Limited and Another to emphasize
that the "Commercial Wisdom" of the CoC is not subject to
judicial review.
31. It was submitted by Shri Tushar Mehta that the CoC
does not become functus officio upon NCLT’s approval of the
Plan. It continues to operate until the Plan is fully
implemented or any challenge to its approval attains finality.

30
(2019) 12 SCC 150
31
(2021) 1 SCC 401
32
(2021) 9 SCC 657
33
(2022) 6 SCC 172
28


Sections 21, 23, and 28 of the IBC, read with Regulation 38 of
the IBBI (CIRP) Regulations, support the continued existence
of the CoC and the authority of the Monitoring Committee.
32.
It was submitted by Shri Tushar Mehta that the CoC
remains empowered to act from time to time. Based on a
proposal submitted in proceedings under Section 95 of the IBC
th
by the ex-promoters, the CoC held a meeting on 6 August
2025 and passed a resolution to allocate the EBITDA and
interest for delayed implementation to FCs. It was submitted
that since the SRA–JSW did not contribute to the EBITDA
earned during CIRP, and benefited from it after the
implementation of the Resolution Plan, it has no rightful claim
over the same.
33. Regarding the contentions raised against Clause 3.1
being in contravention of law, it was submitted by Shri Tushar
Mehta that this clause permitted the CoC, with 66% approval,
to extend the implementation period. It was submitted that
this was done to ensure successful implementation of the
Resolution Plan and was a valid exercise of commercial
wisdom, not open to judicial interference. He further
submitted that Clause 3.1(a) read with Clause 4 (iii) of the
29


Resolution Plan was inserted in compliance with Section
30(2)(d) of the IBC to provide for implementation and
supervision.
vii. Successful Resolution Applicant – JSW
34. Shri Neeraj Kishan Kaul, learned Senior Counsel for
the SRA–JSW, opened his submissions by questioning the
locus standi of the erstwhile promoters, contending that they
are not “persons aggrieved” within the meaning of the IBC. It
was submitted that the appeals raise frivolous objections
concerning the timeline of implementation, payments to OCs
and equity infusion, and are in fact attempts to interfere with
and derail the Resolution Process. Reliance was placed on
Arun Kumar Jagatramka v. Jindal Steel and Power
34
Limited and Another and Phoenix ARC Private Limited
35
v. Spade Financial Services Limited and Others to
submit that related parties such as erstwhile promoters must
be kept out of the CIRP to avoid the process from being
sabotaged.

34
(2021) 7 SCC 474
35
(2021) 3 SCC 475
30


35. Shri Kaul further submitted that the issues raised by
the Appellants do not fall within the exhaustive scope of
Section 61(3) of the IBC, and no substantial question of law
has been raised as per the mandate of Section 62 of the IBC.
It was submitted that the arguments concerning EBITDA do
not arise from any legal or regulatory mandate and were not
36
contemplated under the Request for Resolution Plan or the
Resolution Plan and that the Appellants have raised several
new grounds for the first time before this Court, including
those relating to implementation delays, equity infusion, and
payments to OCs.
36. It was submitted by Shri Kaul that the erstwhile
promoters, were responsible for the Corporate Debtor’s
insolvency and had acted in a mala fide and obstructive
th
manner during the CIRP. The NCLT, in its order dated 5
September 2019, recorded findings of deliberate attempts to
delay the process by the erstwhile promoters and imposed
costs for the said conduct.
37. Regarding the contentions raised against Clauses
3.1(a) and 4(iii) of the Resolution Plan, Shri Kaul submitted

36
“RfRP” for short.
31


that the said Clauses merely permit the CoC to extend the
implementation timeline, which falls within its commercial
wisdom and complies with Regulation 38(2) of the IBBI (CIRP)
Regulations and that a challenge to the said Clauses has been
raised for the first time at the stage of oral arguments before
this Court, which cannot be permitted.
38. Regarding the issue of priority payments to OCs, it
was submitted by Shri Kaul that even though the liquidation
value payable to the OCs was nil , the SRA – JSW offered an ex
gratia payment to the OCs. It was submitted that as per the
law in force during the approval of the Resolution Plan by the
Adjudicating Authority, the OCs were to be paid only the
“amount due” as per the Resolution Plan in priority over the
FCs. Since, no amount was due to the OCs, they were not paid
in priority and the Resolution Plan was compliant with the law
as it stood. It was further submitted that the amendment to
th
Regulation 38(1) of the IBBI (CIRP) Regulations dated 27
November 2019, is not applicable to the present case as the
same was brought into effect after the approval of the
Resolution Plan by the NCLT.
32


39. Regarding the contention of delay in implementation
of the Resolution Plan, Shri Kaul submitted that such delay
was caused by external factors not in control of the SRA – JSW.
He submitted that the NCLT’s modifications to the Plan vide
th
its order dated 5 September 2019 were unilateral in nature
and could not be brought in force without approval of the CoC.
th
It was further submitted that thereafter, a PAO dated 10
October 2019 was issued by the ED attaching assets of the
Corporate Debtor. He submitted that in the appeal filed by the
SRA – JSW against the unilateral modifications of the NCLT,
th
the NCLAT stayed the implementation of the Plan until 17
February 2020.
40. It was further submitted by Shri Kaul that with the
insertion of Section 32A in the IBC through an ordinance
th
dated 28 December 2019, the SRA was entitled to protection
from criminal prosecution for acts of the erstwhile
management of the Corporate Debtor. It is submitted that
based on the PAO and the other criminal proceedings, the CoC
extended the implementation timeline, and the Plan was
th
implemented on 26 March 2021 with the payment of Rs.
33


19,350 crore made by the SRA – JSW to the FCs of the
Corporate Debtor.
41. Shri Kaul submitted that repeated clarifications were
sought by the SRA–JSW and the CoC from this Court
regarding the handover of the unencumbered assets of the
Corporate Debtor. He submitted that this Court, ultimately,
th
vide order dated 11 December 2024, directed that the
Corporate Debtor’s assets be handed over to the SRA – JSW
by the ED. He also submitted that in separate proceedings, the
Delhi High Court set aside criminal proceedings against the
resolved entity – BPSL, holding that no prosecution could lie
against it post – resolution. It was therefore submitted that the
entire period of delay could not be attributable to the SRA –
JSW as it required the possession of unencumbered assets of
the Corporate Debtor before it could implement the Resolution
Plan.
42. Shri Kaul submitted that the interest for delay
cannot be claimed by the CoC, as it had, itself, unconditionally
extended the timeline. It was submitted that the CoC had
admitted that the delay was attributable to the ED’s actions
and not to the SRA – JSW.
34


43. It was further submitted by Shri Kaul that the SRA–
JSW has fulfilled all its obligations under the Plan. An amount
of Rs. 100 crore was infused as equity, with the balance
infused via CCDs, which qualify as equity as per the judgment
of this Court in the case of IFCI Limited v. Sutanu Sinha
37
and Others . It was therefore submitted that the CoC itself
confirmed full compliance and supported the SRA – JSW’s
position.
44. Regarding the issue of distribution of EBITDA, Shri
Kaul submitted that it is only an “accounting term” and does
not reflect actual profitability. After accounting for taxes,
interest, depreciation, and amortization, the Corporate Debtor
had incurred losses of Rs. 16,616 crore in total during the
CIRP period. He further submitted that neither the RfRP nor
the Resolution Plan provides for EBITDA distribution. The
Resolution Plan binds all stakeholders under Section 31(1) of
the IBC and no upward or downward movement of claims is
permissible unless expressly provided for by the Resolution
Plan. It was submitted that accepting such a novel claim for
distribution of EBITDA would be in contravention of the

37
2023 SCC OnLine SC 1529
35


judgment of this Court in the case of Ghanshyam Mishra
(supra).
45. It was further submitted by Shri Kaul that the CoC
th
resolution dated 6 August 2025 claiming entitlement to
EBITDA is ultra vires . He submitted that the CoC was aware
of the erstwhile promoters’ defences in the personal insolvency
proceedings since 2020, and the CIRP is entirely distinct from
personal insolvency proceedings under Section 95 of the IBC.
th
It was submitted that the NCLT, in its order dated 7 October
2024, has also recognized this distinction. He submitted that
no appeal was filed by the CoC against the NCLAT’s findings
on distribution of EBITDA, and hence, the CoC cannot
challenge the same at this stage.
46. Shri Kaul further submitted that the CoC, during
NCLAT proceedings, had acknowledged that there was no
th
provision for EBITDA distribution. In its resolution dated 4
July 2020, it decided that the EBITDA would remain with the
Corporate Debtor. It was submitted that this constitutes a
judicial admission and the CoC cannot be permitted to change
its stand at this stage of the proceedings before this Court.
36


47. Regarding the contentions of Appellant – Jaldhi, Shri
Kaul submitted that it was correctly classified as a contingent
creditor. It was further submitted that the NCLT found that it
had initially presented itself as such and that the IBC permits
sub-classification of OCs as contingent and crystallized
claims, where justified and the same has been affirmed by this
Court in the case of Supreme Court Essar .
48. It is submitted that Jaldhi treated itself as a
contingent creditor as it was under the impression that
contingent claims cannot be settled under a Resolution Plan.
It was only later that it changed its stance on a wrong
understanding that no distinction in the treatment of claims
amongst a class of OCs was permissible. It is therefore
submitted that the objectives of the IBC cannot be stretched
so far as to treat unequals as equals and the sub –
classification of OCs is permissible in law.
49. Shri Kaul submitted that Jaldhi had filed its claim
on the basis of certain international arbitral awards which
were passed in its favour. He submitted that as on the date of
the commencement of the CIRP, the appellant had not been
successful in the enforcement of the award and therefore the
37


claims remained contingent as foreign awards are not
automatically binding under Indian law. Pertinently, the
appellant had also withdrawn the enforcement proceedings
which were pending before the Calcutta High Court and the
th
same has been reflected in the orders dated 4 January 2022
nd
and 22 August 2023 passed by the High Court. It is therefore
submitted that once the enforcement petitions filed before the
Calcutta High Court were withdrawn, the foreign award could
not be enforced and was not binding under Indian law.
viii. Submissions in Rejoinder
50. In rejoinder , Shri Dhruv Mehta, learned Senior
Counsel for the erstwhile promoters submitted that EBITDA
represents the operating profit of the Corporate Debtor and is
not merely an accounting figure, as contended by the SRA–
JSW. It was submitted that the NCLAT, in the impugned
judgment, has also used the terms “profits” and “EBITDA”
interchangeably, reinforcing this interpretation. It was further
submitted that SRA–JSW, having not challenged the
impugned judgment, is precluded from now contesting the
NCLAT’s understanding of EBITDA.
38


51. Shri Dhruv Mehta lastly submitted that the assertion
by SRA – JSW that there were no profits during the CIRP
period is contrary to the record. The RP, in his affidavit,
confirmed the existence of EBITDA valued at Rs. 1,813 crores
for the relevant period. It was submitted that the deduction of
interest, taxes, depreciation, and amortization to claim the
absence of profit was stated to be misleading, as these
deductions do not involve actual cash outflow and hence do
not affect the liquidity available for distribution to the FCs.
IV. ANALYSIS
52. With the assistance of the learned Senior
Counsel/counsel for the parties, we have perused the entire
material placed on record.
a. Locus standi of the erstwhile promoters
53. At the outset, the SRA – JSW as well as the CoC have
heavily challenged the of the erstwhile promoters of the
locus
Corporate Debtor. To support their argument, reliance has
been placed on Section 62 of the IBC, which reads thus:
“ 62. Appeal to Supreme Court .—(1) Any person
aggrieved by an order of the National Company
Law Appellate Tribunal may file an appeal to the
Supreme Court on a question of law arising out of
39


such order under this Code within forty-five days
from the date of receipt of such order.
(2) The Supreme Court may, if it is satisfied that a
person was prevented by sufficient cause from
filing an appeal within forty-five days, allow the
appeal to be filed within a further period not
exceeding fifteen days.”

54. On a bare perusal of Section 62 of the IBC, it is clear
that the interpretation of the term “person aggrieved” is not
limited or defined. However, the objectives of the IBC itself
must be kept in mind while interpreting the said term. To
ascertain the objectives of the IBC, it will be apposite to
examine its preamble, which reads thus:
“An Act to consolidate and amend the laws relating
to reorganisation and insolvency resolution of
corporate persons, partnership firms and
individuals in a time-bound manner for
maximisation of value of assets of such persons, to
promote entrepreneurship, availability of credit
and balance the interests of all the stakeholders
including alteration in the order of priority of
payment of Government dues and to establish an
Insolvency and Bankruptcy Board of India, and for
matters connected therewith or incidental
thereto.”


55. On a perusal of the said preamble, it can be seen that
the IBC was brought in to consolidate the laws related to the
reorganization and insolvency resolution of corporate persons
in a time – bound manner which would result in the promotion
40


of entrepreneurship and the balancing of the interests of all
shareholders. The main purpose of the enactment therefore is
to ensure that the company undergoing insolvency
proceedings is revived or liquidated expeditiously within a
stipulated timeframe.
56. The said objective of expeditious resolution can be
further found in the IBC under Section 12, which reads thus:
“ 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 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
41


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.”


57. A bare perusal of Section 12 of the IBC reveals that
precise timelines have been provided for all the different steps
that have to be taken during the CIRP of a company. The
proviso to Section 12 of the IBC states that any extension to
the fixed timelines may not be granted more than once. This
further shows that the IBC does not allow any undue delays
in the completion of the CIRP of a company.
58. It is thus clear that the IBC proposes to carry out the
Resolution Process of a Company expeditiously in a time –
bound fashion.
59. It was submitted by the SRA – JSW as well as the
CoC that after the CIRP is triggered, the erstwhile promoters’
relationship with the Corporate Debtor – BPSL ceases to exist
and they cannot be included in the definition of “person
42


aggrieved”. It was also submitted that the conduct of the
Appellants – erstwhile promoters in the CoC meetings, before
the NCLT, NCLAT and this Court would reveal that these
appeals are an attempt to interfere with the task of reviving
the Corporate Debtor undertaken by the SRA – JSW.
60. This Court, in the case of Arun Kumar Jagatramka
(supra), observed thus:

43

(Emphasis supplied)

61. It can thus be seen that this Court has observed that
one of the integral objectives of the IBC is to ensure that the
interests of the company undergoing CIRP are not influenced
by the interests of the erstwhile management and that this can
only be achieved by applying a purposive interpretation to the
provisions of the Code by not permitting the problems of the
earlier regime to enter the resolved/revived entity through the
backdoor.
62. The Appellants – erstwhile promoters have heavily
relied on the judgment of this Court in Vijay Kumar Jain
(supra), wherein this Court held thus:
“ 19.5. Further, under Regulation 37(1)( f ), a
resolution plan may provide for reduction in
the amount payable to the creditors, which
again vitally impacts the rights of a guarantor.
Last but not the least, a resolution plan which
has been approved or rejected by an order of
the adjudicating authority, has to be sent to
“participants” which would include members of
the erstwhile Board of Directors — vide
Regulation 39(5) of the CIRP Regulations.
44

(Emphasis supplied)


63. In view of the aforesaid judgment of this Court, since
the Resolution Plan also affects the rights of the guarantors,
we find that the SRA – JSW and the CoC are not right in
submitting that the appeals at the instance of the appellants
would not be maintainable. In any case, rather than non-
suiting the appellants on the ground of locus , we propose to
decide the appeals on merits after considering the
submissions made on behalf of all the parties. However, while
doing so, it will also be apposite to consider the conduct of the
erstwhile promoters during the CIRP.
b. Conduct of Erstwhile Promoters
64. It is submitted by the SRA – JSW that Mr. Sanjay
Singal (erstwhile Promoter), had attended just one meeting of
45


the CoC himself and had attended just two meetings through
his authorized representatives. Furthermore, Mrs. Aarti
Singal, according to the SRA – JSW, had not attended even a
single meeting of the CoC. In this respect, it will also be
relevant to refer to the observations made by NCLT in its
th
Judgment and Order dated 5 September 2019 while
approving the Resolution Plan. The NCLT, after reproducing
the entire table showing the attendance of the erstwhile
management and exhibiting the lackluster participation of the
Appellants, observed thus:

46

a) …….
b) …….

……..”
(Emphasis supplied)

65. It can thus be seen that after the NCLT had heard
the matter in detail, various applications had been filed by the
erstwhile management, including Mr. Sanjay Singal before
47


various forums. This had led to a delay in the pronouncement
of the approval order by the NCLT. A specific observation has
been made by the NCLT that the erstwhile promoters were
making efforts to cause delays which indicated how desperate
and frustrated they were. The NCLT also imposed a cost of Rs.
1 Lakh on the Appellants – erstwhile promoters as it concluded
that the application seeking copies of the Resolution Plan filed
by them was frivolous.
66. It can thus clearly be seen that the entire attempt of
the appellants has been to thwart the CIRP and to not permit
the same to be taken to a logical end. Having observed the
conduct of the Appellants, we shall now proceed to deal with
their contentions on merit.
c. Existence of the CoC after approval of the Resolution
Plan by the Adjudicating Authority
67. It is submitted by Shri Dhruv Mehta appearing on
behalf of the Appellants – erstwhile promoters that the CoC
becomes functus officio after the approval of the Resolution
Plan by the Adjudicating Authority. He submitted that the IBC
does not recognize the concept of an “erstwhile CoC” and the
CoC is to work with the RP. He submitted that since the role
48


of the RP ends after the approval of the Resolution Plan, the
CoC cannot exercise its authority independently. Per contra ,
Shri Tushar Mehta, appearing on behalf of the CoC submitted
that the CoC does not lose its authority after the approval of
the Resolution Plan. He submitted that the CoC remains in
existence until the Resolution Plan is fully implemented or a
challenge to the approval order passed by the Adjudicating
Authority attains finality, whichever comes later. It is
submitted that the provisions of the IBC and the IBBI (CIRP)
Regulations enable the CoC to set up a monitoring committee
to oversee the implementation of the Resolution Plan and thus
on a conjoint reading of the said provisions, it is clear that the
CoC remains in existence till the Resolution Plan is
implemented or the appeal is finally decided by this Court.
68. In this respect, it would be relevant to refer to
Sections 20, 21, 24, 28 and 30 of the IBC, which read thus:
“ 20. Management of operations of corporate
debtor as going concern .—(1) The interim
resolution professional shall 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.
(2) For the purposes of sub-section (1), the interim
resolution professional shall have the authority—
49


( a ) to appoint accountants, legal or other
professionals as may be necessary;
( b ) to enter into contracts on behalf of the
corporate debtor or to amend or modify the
contracts or transactions which were
entered into before the commencement of
corporate insolvency resolution process;
( c ) to raise interim finance provided that
no security interest shall be created over
any encumbered property of the corporate
debtor without the prior consent of the
creditors whose debt is secured over such
encumbered property:
Provided that no prior consent of the creditor shall be
required where the value of such property is not less
than the amount equivalent to twice the amount of
the debt.
( d ) to issue instructions to personnel of the
corporate debtor as may be necessary for
keeping the corporate debtor as a going
concern; and
( e ) to take all such actions as are
necessary to keep the corporate debtor as
a going concern.
21. Committee of creditors .—(1) The interim
resolution professional shall after collation of all
claims received against the corporate debtor and
determination of the financial position of the
corporate debtor, constitute a committee of creditors.
(2) The committee of creditors shall comprise all
financial creditors of the corporate debtor:
Provided that a financial creditor or the authorised
representative of the financial creditor referred to in
sub-section (6) or sub-section (6-A) or sub-section (5)
of Section 24, if it is a related party of the corporate
debtor, shall not have any right of representation,
participation or voting in a meeting of the committee
of creditors:
50


Provided further that the first proviso shall not apply
to a financial creditor, regulated by a financial sector
regulator, if it is a related party of the corporate
debtor solely on account of conversion or
substitution of debt into equity shares or
instruments convertible into equity shares or
completion of such transactions as may be
prescribed, prior to the insolvency commencement
date.
(3) Subject to sub-sections (6) and (6-A), where the
corporate debtor owes financial debts to two or more
financial creditors as part of a consortium or
agreement, each such financial creditor shall be part
of the committee of creditors and their voting share
shall be determined on the basis of the financial
debts owed to them.
(4) Where any person is a financial creditor as well as
an operational creditor,—
( a ) such person shall be a financial
creditor to the extent of the financial debt
owed by the corporate debtor, and shall be
included in the committee of creditors,
with voting share proportionate to the
extent of financial debts owed to such
creditor;
( b ) such person shall be considered to be
an operational creditor to the extent of the
operational debt owed by the corporate
debtor to such creditor.
(5) Where an operational creditor has assigned or
legally transferred any operational debt to a financial
creditor, the assignee or transferee shall be
considered as an operational creditor to the extent of
such assignment or legal transfer.
(6) Where the terms of the financial debt extended as
part of a consortium arrangement or syndicated
facility provide for a single trustee or agent to act for
all financial creditors, each financial creditor may—
51


( a ) authorise the trustee or agent to act on
his behalf in the committee of creditors to
the extent of his voting share;
( b ) represent himself in the committee of
creditors to the extent of his voting share;
( c ) appoint an insolvency professional
(other than the resolution professional) at
his own cost to represent himself in the
committee of creditors to the extent of his
voting share; or
( d ) exercise his right to vote to the extent
of his voting share with one or more
financial creditors jointly or severally.
(6-A) Where a financial debt—
( a ) is in the form of securities or deposits
and the terms of the financial debt provide
for appointment of a trustee or agent to act
as authorised representative for all the
financial creditors, such trustee or agent
shall act on behalf of such financial
creditors;
( b ) is owed to a class of creditors exceeding
the number as may be specified, other
than the creditors covered under clause ( a )
or sub-section (6), the interim resolution
professional shall make an application to
the Adjudicating Authority along with the
list of all financial creditors, containing the
name of an insolvency professional, other
than the interim resolution professional,
to act as their authorised representative
who shall be appointed by the
Adjudicating Authority prior to the first
meeting of the committee of creditors;
( c ) is represented by a guardian, executor
or administrator, such person shall act as
authorised representative on behalf of
such financial creditors,
52


and such authorised representative under clause ( a )
or clause ( b ) or clause ( c ) shall attend the meetings of
the committee of creditors, and vote on behalf of each
financial creditor to the extent of his voting share.
(6-B) The remuneration payable to the authorised
representative—
( i ) under clauses ( a ) and ( c ) of sub-section
(6-A), if any, shall be as per the terms of
the financial debt or the relevant
documentation; and
( ii ) under clause ( b ) of sub-section (6-A)
shall be as specified which shall form part
of the insolvency resolution process costs.
(7) The Board may specify the manner of voting and
the determining of the voting share in respect of
financial debts covered under sub-sections (6) and
(6-A).
(8) Save as otherwise provided in this Code, all
decisions of the committee of creditors shall be taken
by a vote of not less than fifty-one per cent. of voting
share of the financial creditors:
Provided that where a corporate debtor does not have
any financial creditors, the committee of creditors
shall be constituted and shall comprise of such
persons to exercise such functions in such manner
as may be specified.
(9) The committee of creditors shall have the right to
require the resolution professional to furnish any
financial information in relation to the corporate
debtor at any time during the corporate insolvency
resolution process.
(10) The resolution professional shall make available
any financial information so required by the
committee of creditors under sub-section (9) within a
period of seven days of such requisition.
x x x x
24. Meeting of committee of creditors .—(1) The
members of the committee of creditors may meet in
53


person or by such electronic means as may be
specified.
(2) All meetings of the committee of creditors shall be
conducted by the resolution professional.
(3) The resolution professional shall give notice of
each meeting of the committee of creditors to—
( a ) members of committee of creditors,
including the authorised representatives
referred to in sub-sections (6) and (6-A) of
Section 21 and sub-section (5);
( b ) members of the suspended Board of
Directors or the partners of the corporate
persons, as the case may be;
( c ) operational creditors or their
representatives if the amount of their
aggregate dues is not less than ten per
cent of the debt.
(4) The directors, partners and one representative of
operational creditors, as referred to in sub-section
(3), may attend the meetings of committee of
creditors, but shall not have any right to vote in such
meetings:
Provided that the absence of any such director,
partner or representative of operational creditors, as
the case may be, shall not invalidate proceedings of
such meeting.
(5) Subject to sub-sections (6), (6-A) and (6-B) of
Section 21, any creditor] who is a member of the
committee of creditors may appoint an insolvency
professional other than the resolution professional to
represent such creditor in a meeting of the committee
of creditors:
Provided that the fees payable to such insolvency
professional representing any individual creditor will
be borne by such creditor.
(6) Each creditor shall vote in accordance with the
voting share assigned to him based on the financial
debts owed to such creditor.
54


(7) The resolution professional shall determine the
voting share to be assigned to each creditor in the
manner specified by the Board.
(8) The meetings of the committee of creditors shall
be conducted in such manner as may be specified.
x x x x
28. Approval of committee of creditors for certain
actions .—(1) Notwithstanding anything contained in
any other law for the time being in force, the
resolution professional, during the corporate
insolvency resolution process, shall not take any of
the following actions without the prior approval of the
committee of creditors namely—
( a ) raise any interim finance in excess of
the amount as may be decided by the
committee of creditors in their meeting;
( b ) create any security interest over the
assets of the corporate debtor;
( c ) change the capital structure of the
corporate debtor, including by way of
issuance of additional securities, creating
a new class of securities or buying back or
redemption of issued securities in case the
corporate debtor is a company;
( d ) record any change in the ownership
interest of the corporate debtor;
( e ) give instructions to financial
institutions maintaining accounts of the
corporate debtor for a debit transaction
from any such accounts in excess of the
amount as may be decided by the
committee of creditors in their meeting;
( f ) undertake any related party
transaction;
( g ) amend any constitutional documents of
the corporate debtor;
( h ) delegate its authority to any other
person;
55


( i ) dispose of or permit the disposal of
shares of any shareholder of the corporate
debtor or their nominees to third parties;
( j ) make any change in the management of
the corporate debtor or its subsidiary;
( k ) transfer rights or financial debts or
operational debts under material
contracts otherwise than in the ordinary
course of business;
( l ) make changes in the appointment or
terms of contract of such personnel as
specified by the committee of creditors; or
( m ) make changes in the appointment or
terms of contract of statutory auditors or
internal auditors of the corporate debtor.
(2) The resolution professional shall convene a
meeting of the committee of creditors and seek the
vote of the creditors prior to taking any of the actions
under sub-section (1).
(3) No action under sub-section (1) shall be approved
by the committee of creditors unless approved by a
vote of sixty-six per cent of the voting shares.
(4) Where any action under sub-section (1) is taken
by the resolution professional without seeking the
approval of the committee of creditors in the manner
as required in this section, such action shall be void.
(5) The committee of creditors may report the actions
of the resolution professional under sub-section (4)
to the Board for taking necessary actions against him
under this Code. Approval of committee of creditors
for certain actions.
x x x x
30. Submission of resolution plan .—(1) A
resolution applicant may submit a resolution
plan along with an affidavit stating that he is eligible
under Section 29-A to the resolution professional
prepared on the basis of the information
memorandum.
56


(2) The resolution professional shall examine each
resolution plan received by him to confirm that each
resolution plan—
( a ) provides for the payment of insolvency
resolution process costs in a manner
specified by the Board in priority to
the payment of other debts of the
corporate debtor;
( b ) provides for the payment of debts of
operational creditors in such manner as
may be specified by the Board which shall
not be less than—
( i ) the amount to be paid to such
creditors in the event of a liquidation
of the corporate debtor under Section
53; or
( ii ) the amount that would have been
paid to such creditors, if the amount
to be distributed under the
resolution plan had been distributed
in accordance with the order of
priority in sub-section (1) of Section
53,
whichever is higher, and provides for the
payment of debts of financial creditors,
who do not vote in favour of the resolution
plan, in such manner as may be specified
by the Board, which shall not be less than
the amount to be paid to such creditors in
accordance with sub-section (1) of Section
53 in the event of a liquidation of the
corporate debtor.
Explanation 1.—For the removal of
doubts, it is hereby clarified that a
distribution in accordance with the
provisions of this clause shall be fair and
equitable to such creditors.
Explanation 2.—For the purposes of this
clause, it is hereby declared that on and
57


from the date of commencement of
the Insolvency and Bankruptcy Code
(Amendment) Act, 2019, the provisions of
this clause shall also apply to the
corporate insolvency resolution process of
a corporate debtor—
( i ) where a resolution plan has not
been approved or rejected by the
Adjudicating Authority;
( ii ) where an appeal has been
preferred under Section 61 or
Section 62 or such an appeal is not
time barred under any provision of
law for the time being in force; or
( iii ) where a legal proceeding has been
initiated in any court against the
decision of the Adjudicating
Authority in respect of a resolution
plan;]
( c ) provides for the management of the
affairs of the corporate debtor after
approval of the resolution plan;
( d ) the implementation and supervision of
the resolution plan;
( e ) does not contravene any of the
provisions of the law for the time being in
force;
( f ) conforms to such other requirements as
may be specified by the Board.
Explanation .—For the purposes of clause ( e ), if any
approval of shareholders is required under
the Companies Act, 2013 (18 of 2013) or any other
law for the time being in force for the implementation
of actions under the resolution plan, such approval
shall be deemed to have been given and it shall not
be a contravention of that Act or law.
(3) The resolution professional shall present to the
committee of creditors for its approval such
58


resolution plans which confirm the conditions
referred to in sub-section (2).
(4) The committee of creditors may approve a
resolution plan by a vote of not less than sixty-six per
cent of voting share of the financial creditors, after
considering its feasibility and viability the manner of
distribution proposed, which may take into account
the order of priority amongst creditors as laid down
in sub-section (1) of Section 53,including the priority
and value of the security interest of a secured
creditor], and such other requirements as may be
specified by the Board:
Provided that the committee of creditors shall not
approve a resolution plan, submitted before the
commencement of the Insolvency and Bankruptcy
Code (Amendment) Ordinance, 2017 (Ord. 7 of 2017),
where the resolution applicant is ineligible under
Section 29-A and may require the resolution
professional to invite a fresh resolution plan where
no other resolution plan is available with it:
Provided further that where the resolution applicant
referred to in the first proviso is ineligible under
clause ( c ) of Section 29-A, the resolution applicant
shall be allowed by the committee of creditors such
period, not exceeding thirty days, to make payment
of overdue amounts in accordance with the proviso
to clause ( c ) of Section 29-A:
Provided also that nothing in the second proviso shall
be construed as extension of period for the purposes
of the proviso to sub-section (3) of Section 12, and
the corporate insolvency resolution process shall be
completed within the period specified in that sub-
section.
Provided also that the eligibility criteria in Section
29-A as amended by the Insolvency and Bankruptcy
Code (Amendment) Ordinance, 2018 (Ord. 6 of 2018)
shall apply to the resolution applicant who has not
submitted resolution plan as on the date of
commencement of the Insolvency and Bankruptcy
Code (Amendment) Ordinance, 2018.
59


(5) The resolution applicant may attend the meeting
of the committee of creditors in which the resolution
plan of the applicant is considered:
Provided that the resolution applicant shall not have
a right to vote at the meeting of the committee of
creditors unless such resolution applicant is also a
financial creditor.
(6) The resolution professional shall submit the
resolution plan as approved by the committee of
creditors to the Adjudicating Authority.”

69. It can be seen that as per Section 20 of the IBC, the
IRP 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. It will further be relevant to note that, under Section
21 of the IBC, the IRP, after collation of all claims received
against the Corporate Debtor and determination of the
financial position of the Corporate Debtor, is required to
constitute a CoC. Under Section 21 of the IBC, the CoC must
be comprised of all FCs of the Corporate Debtor. However,
proviso to sub-section (2) of Section 21 of the IBC provides that
if a financial creditor or the authorised representative of the
financial creditor referred to in sub-section (6) or sub-section
(6-A) or sub-section (5) of Section 24 of the IBC is a related
party of the corporate debtor, he shall not have any right of
60


representation, participation or voting in a meeting of the CoC.
No doubt that the second proviso thereof excludes certain
related parties of a corporate debtor from the applicability of
the first proviso . However, the same would not be relevant for
the purpose of the present matter.
70. Section 24 of the IBC deals with the meeting of the
creditors. Sub-section (1) of Section 28 of the IBC, which
begins with a non-obstante clause, requires that the RP,
during the CIRP, shall not take any of the actions therein
without the prior approval of the CoC. Such decisions are
required to be taken by the CoC after putting the matters
enumerated in sub-section (1) thereof to vote. Under sub-
section (4) of Section 30 of the IBC, the CoC considers approval
of resolution plan by a vote of not less than 66% of voting
share of the financial creditors.
71. For considering the submissions in this regard, it will
also be relevant to refer to certain provisions of the IBBI (CIRP)
Regulations. Clause (d) of Regulation 2 of the IBBI (CIRP)
Regulations, defines “committee” as a committee of creditors
.
established under Section 21 of the IBC
61


72. Regulation 18 of the IBBI (CIRP) Regulations reads
thus:
“18. Meetings of the committee .—(1) A resolution
professional shall convene a meeting of the
committee before lapse of thirty days from the last
meeting:
Provided that the committee may decide to extend the
interval between such meetings subject to the
condition that there shall be at least one meeting in
each quarter.
(2) A resolution professional may convene a meeting,
if he considers it necessary, on a request received
from members of the committee and shall convene a
meeting if the same is made by members of the
committee representing at least thirty three per cent
of the voting rights:
Explanation : For the purposes of sub-regulation (2) it
is clarified that meeting(s) may be convened under
this sub-regulation till the resolution plan is
approved under sub-section (1) of Section 31 or order
for liquidation is passed under Section 33 and decide
on matters which do not affect the resolution plan
submitted before the Adjudicating Authority.
……...”

73. It is to be noted that Explanation to clause (2) of
Regulation 18 of the IBBI (CIRP) Regulations came to be added
th
by Notification No. IBBI/2022-23/GN/REG093 dated 16
September 2022. The said Explanation would reveal that it
clarified that for the purposes of clause (2) thereof the
meeting(s) may be convened under the said clause till the
Resolution Plan is approved under sub-section (1) of Section
62


31 of the IBC or an order for liquidation is passed under
Section 33 of the IBC. However, the only rider is that it shall
not decide on matters which do not affect the Resolution Plan
submitted before the Adjudicating Authority.
74. It will also be relevant to note that by Notification No.
th
IBBI/2023-24/GN/REG113 dated 15 February 2024 clauses
(4) and (5) of Regulation 38 were brought on the statute book,
which read thus:
“ 38. Mandatory contents of the resolution plan .—
………..
(4) The committee may consider the requirement of a
monitoring committee for the implementation of the
resolution plan.
(5) Where the committee considers that a monitoring
committee for the implementation of the resolution
plan is required, it may, while approving the
resolution plan, decide to constitute the same with
the resolution professional or propose another
insolvency professional, or any other person as its
members:
Provided that where the resolution professional is
proposed to be part of the monitoring committee, the
monthly fee payable to him shall not exceed the
monthly fee received by him during the corporate
insolvency resolution process.”

75. However, by way of Notification No. F.No. IBBI/2024-
rd rd
25/GN/REG122 dated 3 February 2025 with effect from 3
63


February 2025, clauses (4) and (5) of Regulation 38 of the IBBI
(CIRP) Regulations were substituted with Regulation 4 (a), (b)
and (c) which read thus:

“ 38. Mandatory contents of the resolution plan .—
………..
(4)( a ) The committee shall consider setting up a
monitoring committee for monitoring and
supervising the implementation of the resolution
plan.
( b ) The monitoring committee may consist of the
resolution professional or any other insolvency
professional, or any other person, including
representatives of the committee and representatives
of resolution applicant(s), as its members:
Provided that where the resolution professional is
proposed to be part of the monitoring committee, the
monthly fee payable to him shall not exceed the
monthly fee received by him during the corporate
insolvency resolution process.
……..”

76. It can thus be seen that though under the old
Regulations, the CoC had an option to constitute the
monitoring committee, under the Regulations which are now
in effect, it has been made mandatory for the CoC to consider
setting up the monitoring committee for monitoring and
supervising the implementation of the Resolution Plan.
64


77. It can further be seen that the CoC is also
empowered to nominate either the RP or any other insolvency
professional or any other person including the representatives
of the committee and the representatives of resolution
applicant(s), as its members. It can thus be seen that the
legislative intent is to empower the CoC to monitor and
supervise the implementation of the resolution plan through
the monitoring committee.
78. We are of the view that if the contention of the
appellants that the CoC becomes functus officio is accepted,
then it would lead to an anomalous situation.
79. As per the IBC and as is the common experience,
after the Resolution Plan is accepted under Section 31 of the
IBC by the Adjudicating Authority, the same does not achieve
finality unless the appeals under Section 61 of the IBC by the
appellate authority and by this Court under Section 62 of the
IBC are decided. It also cannot be ignored that in certain
cases, the Resolution Plan may not be implemented and the
matter may lead to liquidation proceedings.
80. In the present matter itself, it can be seen that when
the matter was first decided by this Court by judgment and
65


nd
order dated 2 May 2025, this Court had directed the
liquidation proceedings to be initiated against the Corporate
Debtor. However, as has already been discussed hereinabove,
the dominant purpose of the IBC is to resort to the liquidation
proceedings as the last option. If the contention of the
erstwhile promoters-cum-directors that the CoC ceases to
exist after the Resolution Plan is accepted, then as already
discussed hereinabove, it will lead to an anomalous situation.
81. It may lead to a situation wherein though the
Resolution Plan is approved by the Adjudicating Authority,
however it is not implemented for ‘a’ reason or ‘b’ reason
thereby leaving the creditors high and dry . If the contention is
accepted, the creditors would not be in a position to take any
steps that are found necessary for realizing its dues from the
Corporate Debtor. The said situation may lead to a state of
limbo . Such cannot be the intention of the legislature which
has enacted the law with the dual purpose of making the
Corporate Debtor an on-going concern and realizing the dues
of the Corporate Debtor.
82. We are of the view that the to clause 2 of
Explanation
Regulation 18 of the IBBI (CIRP) Regulations clarifies the
66


position. It empowers the CoC to hold meetings till either the
Resolution Plan is approved under Section 31(1) of the IBC or
an order for liquidation is passed under Section 33 of the IBC.
It is empowered to decide all the matters except the matters
which do not affect the Resolution Plan submitted before the
Adjudicating Authority.
83. It may not be out of place to mention that the CoC
has a vital interest in the Resolution Plan and that such an
interest would continue till the Resolution Plan is actually
implemented. It is only after the implementation of the
Resolution Plan that payment can be made to the creditors, of
their dues, in accordance with the Resolution Plan, which has
been approved by the Adjudicating Authority.
84. If the contention of the appellants is accepted, then
in a case like the present one wherein on account of variety of
reasons the Resolution Plan could not be implemented and the
creditors could not be paid their dues as per the Resolution
Plan, it would lead to an anomalous situation which could not
have been the intention of the legislature.
85. We are therefore of the view that in view of
Explanation to clause 2 of Regulation 18 of the IBBI (CIRP)
67


Regulations, the CoC continues to exist till the Resolution Plan
is implemented or an order of liquidation is passed under
Section 33 of the IBC. It will not be out of place to mention
that the cloud of uncertainty exists till a finality is given by
this Court in the proceedings under Section 62 of the IBC.
86. In the present case, it will be relevant to see that
th
though the Resolution Plan was implemented on 26 March
2021, there was a statement made by the learned Senior
Counsel for the CoC to the effect that in the event the appeals
succeed, the creditors would refund the amount. As such, till
the present appeals are decided, the CoC had a vital interest
in the proceedings. We are therefore unable to accept the
contention raised by the appellants (erstwhile promoters-cum-
directors of the Corporate Debtor) in that regard and the same
are liable to be rejected.
d. Grounds of Appeal
87. It is submitted by the SRA – JSW that the present
appeals basically arise out of the concurrent findings of fact.
It is not in dispute that the Resolution Plan submitted by the
SRA – JSW, which was submitted after following the entire
procedure prescribed under the IBC and IBBI (CIRP)
68


Regulations was duly approved by the CoC and was approved
by the Adjudicating Authority vide its Judgment and Order
th
dated 5 September 2019 with certain conditions. However,
while dismissing the appeals thereagainst preferred by Mr.
Sanjay Singal, Kalyani Transco, Jaldhi, Medi, Darcl, the State
of Odisha and others, the NCLAT allowed the appeal of the SRA
– JSW and clarified/modified some of the conditions laid down
by the NCLT. It is relevant to note that the NCLT vide its
th
Judgment and Order dated 5 September 2019, relying on the
judgment of NCLAT in Standard Chartered Bank v. Satish
Kumar Gupta, Resolution Professional of Essar Steel
38
Limited and Others (hereinafter referred to as “ NCLAT
Essar ”), while approving the Resolution Plan submitted by
SRA, had directed distribution of EBITDA generated during
the CIRP amongst the creditors of the Corporate Debtor.
However, since the judgment of the NCLAT in NCLAT Essar
was reversed by this Court in Supreme Court Essar , the
NCLAT, while disposing of the appeal filed by SRA – JSW,
relied on the Supreme Court Essar and directed the
Monitoring Committee to examine the RfRP and decide on

38
2019 SCC OnLine NCLAT 388
69


distribution of EBITDA. As such, the conditions made in
th
paragraph 128(j) of the judgment and order dated 5
September 2019 passed by the Adjudicating Authority were
set aside and the Monitoring Committee with the help of RP
was directed to go through the RfRP issued in terms of Section
25 of the IBC.
88. It can thus be seen that except the finding on
distribution of EBITDA present appeals arise out of the
concurrent findings by the NCLT and the NCLAT.
89. It is to be noted that an appeal to this Court under
Section 62 of the IBC is available only on a question of law.
90. The appeal provided under Section 61 of the IBC
before the appellate authority is available only on the following
five grounds:
(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;
70


(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.

91. It can thus be seen that an appeal against an order
approving a Resolution Plan would be available before the
NCLAT only when it is found that the approved resolution plan
is in contravention of the provisions of any law for the time
being in force or there has been any material irregularity in
exercise of powers by the resolution professional during the
corporate insolvency resolution period or that the debts owed
to OCs of the Corporate Debtor have not been provided for in
the resolution plan in the manner specified by the Board or
that the insolvency resolution process costs have not been
provided for repayment in priority to all other debts or the
resolution plan does not comply with any other criteria
specified by the Board.
71


92. A perusal of the material placed on record in the
present matter would reveal that the appeal before the NCLAT
in this matter does not fit in any of the aforesaid criteria.
Having said that, since an appeal before the NCLAT itself was
not made out, we find that the appeals before this Court on a
conjoint reading of Sections 61 and 62 are not tenable since
no question of law pertaining to any of the five grounds
specified in Section 61 of the IBC arises for consideration in
the present case.
93. Not only that, as we have already observed
hereinbefore, this is a case arising out of concurrent findings.
In this regard, we may gainfully refer to the recent judgment
of this Court in the case of Uttar Haryana Bijli Vitran Nigam
Limited and Another v. Adani Power (Mundra) Limited
39
and Another to which one of us (Gavai, J. as he then was)
was a party, wherein this Court while considering an almost
similar provision in the Electricity Act, 2003 (Section 125),
providing for an appeal before this Court only on a question of
law and where a case arose out of concurrent findings of fact,
has observed thus:

39
(2023) 14 SCC 731
72


“ 11. It will further be relevant to note that the
present appeal arises out of concurrent findings of
fact arrived at by both the authorities.
12. This Court, in Maharashtra State Electricity
Distribution Co. Ltd. v. Adani Power Maharashtra
Ltd. , (2023) 7 SCC 401], after considering the
relevant provisions under the Electricity Act, 2003
with regard to appointment, qualifications and
Members of the CEA, CERC and the learned A PTEL ,
held that these bodies are bodies consisting of
experts in the field. After considering various
judgments on the issue, this Court observed thus
: (SCC p. 452, para 121)
“ 121 . Recently, the Constitution Bench
of this Court in Vivek Narayan Sharma
(Demonetisation Case-5 J.) v. Union of
India , (2023) 3 SCC 1] has held that the
Courts should be slow in interfering
with the decisions taken by the experts
in the field and unless it is found that
the expert bodies have failed to take into
consideration the mandatory statutory
provisions or the decisions taken are
based on extraneous considerations or
they are ex facie arbitrary and illegal, it
will not be appropriate for this Court to
substitute its views with that of the
expert bodies.”
13. In our opinion, the concurrent view taken by
PTEL
CERC and A cannot be said to be a view taken
in ignorance of the mandatory statutory provisions
nor can it be said that it is based on extraneous
consideration. The view also cannot be said to be
ex facie arbitrary or illegal. As such, no
interference would be warranted in the present
appeal.”

94. It can thus be seen that this Court has taken a view
that when a concurrent view has been taken by two
73


adjudicating authorities provided under the special statute,
unless it is found that such a view was in ignorance of the
mandatory statutory provisions or was based on extraneous
consideration or was ex-facie arbitrary or illegal, an
interference would not be warranted.
95. In the present matter also the findings on all the
issues are concurrent. It is only insofar as the issue with
regard to distribution of EBITDA wherein the NCLAT has set
aside the directions of the NCLT. However, in order to avoid
repetition, we will not deal with the said issue here since in
the foregoing paragraphs, we have elaborately dealt with the
contentions qua the issue of distribution of EBITDA.
96. We are therefore of the view that the appellants could
have been non-suited on the short ground of concurrent
findings of the NCLT and the NCLAT alone. However, we
propose to deal with the other contentions raised by the
Appellants – erstwhile promoters on merits as well.

e. Legality of clause permitting CoC to extend the
period for implementation of the Resolution Plan
97. The next issue which is pressed into service by the
learned Senior Counsel on behalf of the erstwhile promoters is
74


with regard to delay in implementation of the Resolution Plan.
Insofar as the clause in the Resolution Plan which empowered
the CoC to extend the date of implementation of the Resolution
Plan by 66% of the majority of the lenders forming part of the
erstwhile CoC is concerned, it is submitted that such an open-
ended clause is liable to be set aside in view of the judgment
of this Court in the case of Ebix Singapore Private Limited
(supra). The learned Senior Counsel for the erstwhile
promoters has also relied on Committee of Creditors of
AMTEK Auto Limited through Corporation Bank v. Dinkar
40
T. Venkatasubramanian and Others .
98. This Court in the said case has held that once the
Resolution Plan has been submitted by an applicant and the
same has been accepted by the CoC, there cannot be any
alterations, amendments or modifications in the Resolution
Plan. However, we find that such is not the case here.
99. For appreciating the rival contentions, it will be
relevant to refer to clause 3 of the Resolution Plan which deals
with the stage of implementation and which reads thus:

40
(2021) 4 SCC 457
75


“ 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 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 in 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”

100. It can thus be seen that clause 3 of the Resolution
Plan provided that steps for implementation of the Resolution
Plan are to be taken within 30 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.
However, our experience in matters like the present case,
shows that on account of various exigencies, it may not be
possible to implement the Resolution Plan within the
prescribed period. What has therefore been sought to be done
76


by the aforesaid clause is to reserve certain discretion in the
CoC to extend the period for implementation of the Resolution
Plan, provided that such an extension is approved by 66%
majority of the lenders forming part of the erstwhile CoC.
101. The aforesaid clause provides for the effective date
which shall not exceed 30 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. It
can thus be seen that clause (3) of the Resolution Plan neither
provided modification nor withdrawal from the Resolution
Plan. The said cannot therefore be stated to be an open ended
or indeterminate plan solely at the discretion of the resolution
applicant. Under the said clause, there is neither a provision
for withdrawal nor modification of the Resolution Plan nor are
there any negotiations envisaged under the said clause of the
Resolution Plan submitted by the SRA – JSW in the present
matter.

102. Insofar as the judgment in the case of Amtek Auto
(supra) is concerned, the SRA therein had sought to
renegotiate the clauses of its Resolution Plan in view of the
Covid-19 pandemic which was held by this Court to be
77


impermissible under the scheme of IBC. We find that such is
not the case here. Neither the SRA – JSW nor the CoC in the
present matter are renegotiating the terms of the Resolution
Plan. Hence the submission in this regard is liable to be
rejected.
f. Delay in implementation of the Resolution Plan
103. The next submission on behalf of the Appellants –
erstwhile promoters is with regard to the inordinate delay in
implementation of the Resolution Plan by the SRA – JSW. It is
submitted by the learned Senior Counsel that though the
Resolution Plan was approved by the Adjudicating Authority
th th
on 5 September 2019, it was implemented on 26 March
2021 and was thus, delayed by a period of one and half years.
It is therefore submitted that on this ground alone, the appeals
deserve to be allowed and the Resolution Plan be set aside.
104. To consider the rival submissions in this regard, we
would have to trace the history of the present matter.

105. As can be seen from the documents placed on record,
there have been several impediments in the implementation of
the Resolution Plan by the SRA – JSW. After the Resolution
78


th
Plan was approved by the CoC on 15 October 2018 and an
application was filed by RP for approval of Resolution Plan on
th th
14 February 2019. Thereafter, the CBI filed an FIR on 5
April 2019 against the Corporate Debtor – BPSL and its
erstwhile management for large scale siphoning and diversion
of funds. Immediately thereafter, the SRA - JSW filed an
th
additional affidavit before the NCLT on 15 April 2019 seeking
protection from acts/omissions of the erstwhile management
of the Corporate Debtor for alleged breach under the
applicable laws including under IPC, PC Act and PMLA. Based
on the CBI’s FIR, the ED registered an ECIR bearing DLZO-
1/02/2019 against the Corporate Debtor – BPSL and its
erstwhile management.
th
106. The NCLT approved the Resolution Plan on 5
September 2019 with certain modifications. It is pertinent to
note that the NCLT had not granted any relief qua the
protections sought by the SRA – JSW in respect of the
prosecution sought to be carried out against the erstwhile
management. Being aggrieved thereby, the SRA – JSW filed an
appeal before the NCLAT contending that it was not liable to
79


share the EBITDA with FCs and OCs and also that it should
be protected against criminal proceedings and attachments.
107. It can therefore be seen that unless the issue with
regard to sharing of EBITDA with FCs was finally decided by
the NCLAT, the Resolution Plan could not have been
implemented inasmuch as the direction of the NCLT had, in
effect, modified the Resolution Plan submitted by the SRA –
JSW.
th
108. It is further to be noted that in the meantime, on 10
October 2019, the ED issued the PAO whereby it attached the
assets of the Corporate Debtor – BPSL at its Odisha Plant
th
worth over Rs.4,025 crore under the PMLA. On 14 October
2019, the NCLAT by an interim order stayed the
implementation of the Resolution Plan which stay remained in
th
operation until 17 February 2020. The NCLAT also stayed the
PAO issued by the ED. It is further to be noted that, despite
the stay of the PAO by the NCLAT, the ED continued with the
PMLA proceedings by filing Original Complaint under Section
8(1) of PMLA before the Adjudicating Authority under PMLA. It
is further to be noted that the CoC had filed an SLP before this
Court seeking interim stay on the PAO and this Court, vide
80


th
order dated 18 December 2019, had issued notice and stayed
the PAO. In the meantime, the ED had filed a Prosecution
Complaint against the Corporate Debtor – BPSL under PMLA
for the offences alleged to have been committed by the
erstwhile management. In the said proceedings, ED had
specifically contended that the Corporate Debtor – BPSL or the
SRA – JSW was not entitled to benefit of Section 32A of IBC.
th
109. On 17 February 2020, vide the Impugned
Judgment and Order, the NCLAT approved the Resolution
Plan of the SRA – JSW by modifying/clarifying some of the
conditions imposed by the NCLT. The NCLAT inter alia also
clarified that BPSL and its assets were entitled to protection
from criminal prosecution under Section 32A of IBC.
110. Being aggrieved by the order passed by the NCLAT,
Mr. Sanjay Singal (erstwhile promoter) filed an appeal before
th
this Court on 24 February 2020. The OCs of the Corporate
Debtor (Kalyani Transco, Jaldhi, Medi and Darcl) also filed
th
separate appeals before this Court. On 29 February 2020,
the CoC filed a separate IA in the pending appeal filed by it
praying for release of the attachment and quashing of
consequential proceedings under PMLA by ED in view of
81


th
Section 32A of IBC. On 5 March 2020, the SRA – JSW filed
an additional affidavit before this Court pointing out that it
was essential to handover unencumbered and clean assets of
the Corporate Debtor to it. It was also submitted that handing
over of unencumbered assets was integral to the Resolution
Plan and such control over the assets of the Corporate Debtor
by SRA – JSW could not be subject to any conditions. In the
present appeals filed by erstwhile promoters of Corporate
Debtors – BPSL and its OCs, this Court recorded the following
th
observations on 6 March 2020:
“…..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.”

th
111. On 19 March 2020, the CoC issued a notice to the
SRA – JSW demanding implementation of the Resolution Plan
within 7 days. The SRA – JSW replied to the said notice
requesting to handover unencumbered and clean assets of the
Corporate Debtor which were free from ED attachment and
criminal prosecution. It appears that in the meantime there
were negotiations between the CoC and the SRA – JSW. It was
the stand of the SRA – JSW that though it was willing to go
82


ahead with the implementation of the Resolution Plan, it was
not obligated to implement the Resolution Plan until there was
clarity in respect of handover of clean and unencumbered
assets of the Corporate Debtor.
112. It is apparent from the record that the CoC filed an
th
application on 30 May 2020 in the appeal pending before this
Court seeking certain directions. Apart from seeking
implementation of the Resolution Plan, the CoC also sought
for a declaration for setting aside of the PAO and any
consequential proceedings, including ED’s prosecution. In the
meantime, it appears that, there was an exchange of
communication between the SRA – JSW and the CoC with
regard to distribution of EBITDA amongst the creditors. It is
th
also to be noted that the NCLT had on 5 September 2019
directed the EBITDA to be shared by the SRA – JSW with the
FCs and OCs and though the said direction was set aside by
the NCLAT vide impugned judgment, the present matter was
nd
still pending before this Court till 2 May 2025 when it was
finally decided by this Court in the earlier round.
113. In the earlier proceedings before this Court, it was
the consistent stand of the SRA – JSW that the RfRP issued by
83


the RP for the CIRP did not provide for the distribution of
EBITDA amongst the creditors. It was therefore their stand
that it was not liable to share the EBITDA with the Creditors.
However, the setting aside of the direction qua distribution of
EBITDA by NCLAT was also challenged by the erstwhile
promoters of the Corporate Debtor – BPSL in the proceedings
before this Court. It is also relevant to note that there was a
lack of clarity in the stand taken by the CoC before the NCLAT
in this regard.
114. It, however, appears from the material placed on
record that during the pendency of the proceedings before this
Court, there was an exchange of communications between the
SRA – JSW and the CoC with regard to extension of the
effective date of implementation of the Resolution Plan. It
further appears that there were discussions between the SRA
– JSW and the members of the CoC which culminated into a
th
resolution of the CoC passed on 26 February 2021 by a
majority of 97.25% voters by which it was provided that the
SRA – JSW was to implement the Resolution Plan on or before
st th
31 March 2021. On 19 March 2021, the CoC filed an
affidavit before this Court to bring on record the said
84


th
development. On 26 March 2021, the SRA – JSW
implemented the Resolution Plan by paying Rs.19,350 crore to
the FCs of the Corporate Debtor.
115.
It can thus be seen that the delay in implementation
of the Resolution Plan is on account of various reasons.
th
Initially, the NCLAT, vide interim order dated 14 October
th
2019, stayed the approval order of the NCLT dated 5
th
September 2019 till 17 February 2020 insofar as it relates to
payment to the creditors. On account of pendency of the
proceedings before the NCLAT, the CoC was not in a position
to handover unencumbered assets to the SRA – JSW as
required under the Resolution Plan. It is further to be noted
that during the pendency of the said proceedings, an
th
Ordinance came to be promulgated on 28 December 2019
which brought in certain amendments to the IBC.
116. As can be seen from the preamble of the said
Ordinance, it has been brought for three purposes. Firstly, to
give the highest priority in repayment to last mile funding to
corporate debtors to prevent insolvency in case the company
goes into CIRP or liquidation. The second purpose was to
provide immunity against prosecution of the Corporate Debtor
85


to prevent action against the property of such Corporate
Debtor and the SRA subject to the fulfilment of certain
conditions. The third one was to fill the critical gaps in the
corporate insolvency framework. By way of the said
amendment, Section 32A of the IBC came to be added, which
reads thus:
“ 32A. Liability for prior offences, etc .—(1)
Notwithstanding anything to the contrary contained
in this Code or any other law for the time being in
force, the liability of a corporate debtor for an offence
committed prior to the commencement of the
corporate insolvency resolution process shall cease,
and the corporate debtor shall not be prosecuted for
such an offence from the date the resolution plan has
been approved by the Adjudicating Authority under
Section 31, if the resolution plan results in the
change in the management or control of the
corporate debtor to a person who was not—
( a ) a promoter or in the management or
control of the corporate debtor or a related
party of such a person; or
( b ) a person with regard to whom the
relevant investigating authority has, on
the basis of material in its possession,
reason to believe that he had abetted or
conspired for the commission of the
offence, and has submitted or filed a
report or a complaint to the relevant
statutory authority or Court:
Provided that if a prosecution had been instituted
during the corporate insolvency resolution process
against such corporate debtor, it shall stand
discharged from the date of approval of the resolution
86


plan subject to requirements of this sub-section
having been fulfilled:
Provided further that every person who was a
“designated partner” as defined in clause ( j ) of
Section 2 of the Limited Liability Partnership Act,
2008 (6 of 2009), or an “officer who is in default”, as
defined in clause (60) of Section 2 of the Companies
Act, 2013 (18 of 2013), or was in any manner
incharge of, or responsible to the corporate debtor for
the conduct of its business or associated with the
corporate debtor in any manner and who was directly
or indirectly involved in the commission of such
offence as per the report submitted or complaint filed
by the investigating authority, shall continue to be
liable to be prosecuted and punished for such an
offence committed by the corporate debtor
notwithstanding that the corporate debtor's liability
has ceased under this sub-section.
(2) No action shall be taken against the property of
the corporate debtor in relation to an offence
committed prior to the commencement of the
corporate insolvency resolution process of the
corporate debtor, where such property is covered
under a resolution plan approved by the Adjudicating
Authority under Section 31, which results in the
change in control of the corporate debtor to a person,
or sale of liquidation assets under the provisions of
Chapter III of Part II of this Code to a person, who
was not—
( i ) a promoter or in the management or
control of the corporate debtor or a related
party of such a person; or
( ii ) a person with regard to whom the
relevant investigating authority has, on
the basis of material in its possession
reason to believe that he had abetted or
conspired for the commission of the
offence, and has submitted or filed a
report or a complaint to the relevant
statutory authority or Court.
87


Explanation .—For the purposes of this sub-section, it
is hereby clarified that,—
( ) an action against the property of the
i
corporate debtor in relation to an offence
shall include the attachment, seizure,
retention or confiscation of such property
under such law as may be applicable to
the corporate debtor;
( ii ) nothing in this sub-section shall be
construed to bar an action against the
property of any person, other than the
corporate debtor or a person who has
acquired such property through corporate
insolvency resolution process or
liquidation process under this Code and
fulfils the requirements specified in this
section, against whom such an action may
be taken under such law as may be
applicable.
(3) Subject to the provisions contained in sub-
sections (1) and (2), and notwithstanding the
immunity given in this section, the corporate debtor
and any person who may be required to provide
assistance under such law as may be applicable to
such corporate debtor or person, shall extend all
assistance and co-operation to any authority
investigating an offence committed prior to the
commencement of the corporate insolvency
resolution process.”

117. It can thus be seen that Section 32A of the IBC which
begins with a non-obstante clause provides that the liability of
the Corporate Debtor for an offence committed prior to the
commencement of the CIRP shall cease, and the Corporate
Debtor shall not be prosecuted for such an offence from the
88


date the Resolution Plan has been approved by the
Adjudicating Authority under Section 31 of the IBC, if the
Resolution Plan results in the change in the management or
control of the Corporate Debtor or if the erstwhile promoter or
any other person who has been retained has not been found
to have abetted or conspired in the commission of the offence.
It further provides that no action shall be taken against the
properties of the Corporate Debtor in relation to an offence
committed prior to the commencement of the CIRP of the
Corporate Debtor, where such property is covered under a
Resolution Plan approved by the Adjudicating Authority under
Section 31 of the IBC.
118. It is to be noted that in the present case, even after
the IBC was amended and Section 32A of the IBC was brought
into the statute, the ED was proceeding further with its
prosecution of the Corporate Debtor. On account of the
pendency of such proceedings, the CoC was not in a position
to hand over the unencumbered assets as required under the
Resolution Plan.
th
119. It is further to be noted that only on 11 December
2024 when the appeals of the ED came to be disposed of by
89


this Court, there was some clarity with regard to the properties
of the Corporate Debtor. However, in the meantime, in view of
th
the resolution passed by the CoC dated 26 February 2021 by
a majority of 97.25% voters, the Resolution Plan was already
implemented by the SRA – JSW.
120. It will be relevant to note that the CoC and the SRA
– JSW were on same page, and were of the view that unless
the assets of the Corporate Debtor – BPSL were not released
and the issue with regard to criminal proceedings were not
clarified, the implementation of the Resolution Plan would not
have been possible. It will be relevant to refer to a joint letter
th
dated 28 February 2020 submitted before this Court by both
the CoC and the SRA – JSW. Relevant extract of which reads
thus:
“5. This is a matter involving implementation of a
Resolution Plan for recovery of an amount of INR
19,350 crores. The plan is approved by 100% of
the lenders. The implementation is presently
underway (new Board has already been appointed)
and would require a period of at least 20 days for
implementation after the decision of this Hon’ble
Supreme Court. In view of the actions of ED after
the NCLAT’s judgment. If the issue concerning the
release of assets of BPSL and criminal proceedings
against BPSL by the ED is not urgently clarified by
the Hon’ble Supreme Court, the implementation of
the Resolution Plan would be affected.”
90


121. A perusal of the communications exchanged between
the parties would reveal that the negotiations were not with
regard to the terms and conditions of the Resolution Plan but
to ensure the immediate implementation of the Resolution
Plan. It can thus be seen that the negotiations took place due
to the consistent efforts made by the lenders of the Corporate
Debtor forming part of the CoC for ensuring implementation
of the Resolution Plan. As already discussed hereinabove, the
th
CoC in its meeting held on 26 February 2021 passed a
resolution to extend the date of implementation of the
st
Resolution Plan to 31 March 2021. The said decision of the
th
CoC was communicated to SRA – JSW vide letter dated 5
March 2021. The CoC also brought this fact to the notice of
this Court by placing on record an affidavit. The CoC had
th
categorically affirmed in its note of submissions dated 19
April 2024 that the SRA – JSW had in fact implemented the
Resolution Plan in entirety and that the amounts had been
distributed amongst all creditors of the Corporate Debtor as
per the Resolution Plan.
122. The appeal filed by the ED was disposed of by this
th
Court vide Order dated 11 December 2024 and the ED was
91


directed to handover the unencumbered assets of the
Corporate Debtor to the SRA – JSW.
123. It can thus be seen that the contention of the
appellants that there was inordinate and deliberate delay in
implementing the Resolution Plan by the SRA – JSW is without
substance.
124. It can also be seen that on account of various factors
like the NCLT directing the EBITDA to be shared with the
creditors, the NCLAT in an appeal staying the order of the
NCLT, after the decision of the NCLAT the pendency of the
proceedings before this Court, and the PAO being passed by
the ED with regard to properties of the Corporate Debtor, the
implementation of the Resolution Plan was jeopardized. Only
th
after this Court disposed of the appeal filed by the ED on 11
December 2024, there was a clarity with regard to various
issues.
th
125. No doubt that while admitting the appeals on 6
March 2021, this Court had recorded the submission of the
CoC that it would return the amount received from the SRA –
JSW in case the appeals succeed. However, even after that, for
a period of more than one year, the situation was ambiguous
92


and there were parallel negotiations between the CoC and the
th
SRA – JSW. Only after 26 February 2021 when the CoC
resolved by a majority of 97.25% voters to extend the time to
st
implement the Resolution Plan till 31 March 2021 and after
th
26 March 2021 when the Resolution Plan was implemented,
the SRA – JSW started running the concern. However, with
regard to the proceedings initiated by ED, the situation, in
spite of Section 32A of the IBC being brought in the statute
th
book, remained uncertain till 11 December 2024.
126. It can thus be seen that the delay is neither
attributable to the CoC nor to the SRA – JSW. As a matter of
fact, both the SRA – JSW and the CoC were making consistent
efforts to get the matter sorted out before this Court so as to
ensure the expeditious implementation of the Resolution Plan.
127. Insofar as the reliance placed by the Appellants –
erstwhile – promoters on the judgment of this Court in the case
of Murari Lal Jalan (supra) is concerned, it can be seen that
in the said case, the Resolution Plan had not been
implemented for a period of almost 5 years after being
approved. Not only that, various directions given by various
forums, including the directions given by this Court were not
93


implemented. In the said case, this Court, vide order dated
th
18 January 2024, had directed the Resolution Applicant to
st
infuse an amount of Rs.150 crore in cash on or before 31
January 2024. It is to be noted that this was the fourth
extension granted by this Court in the said matter. The
aforesaid direction issued by this Court was also not
implemented. Again, an application for extension of period was
made before this Court. The same was also rejected vide order
nd
dated 2 February 2024. In this factual background, this
Court found that the order of the NCLAT upholding the order
of the NCLT was not sustainable.
128. In the facts of the present matter, both the CoC and
the SRA – JSW found it difficult to implement the Resolution
Plan on account of various issues including the PMLA
proceedings initiated against the Corporate Debtor - BPSL and
its management, the provisional attachment of properties and
the unilateral directions of NCLT to distribute EBITDA etc. It
is further to be noted that both the CoC and the SRA - JSW
were jointly making efforts before this Court for
implementation of the Resolution Plan which was in fact
th
implemented on 26 March 2021.
94


129. In that view of the matter, we find that the facts in
the case of Consortium of Murai Lal Jalan and Florian
Fritsch and Another (supra) are clearly different from the
present case as the delay in implementation of the Resolution
Plan in that case was clearly attributed towards the SRA
therein.
g. Contravention of law
130. It is pertinent to note that the Appellants – erstwhile
promoters have raised the contention that the Resolution Plan
submitted by the SRA – JSW was not in compliance with the
provisions of the IBC and the IBBI (CIRP) Regulations as it did
not envisage the payment to the OCs before the FCs. Per
contra , the SRA – JSW has submitted that the Resolution Plan
was compliant with the law as it stood at the time of
submission of the Resolution Plan and that any subsequent
changes in law shall not affect the validity of the Resolution
Plan.

131. In order to test the contention on this ground, we
must, parallelly, go through the timeline of the approval of the
Resolution Plan by the CoC, and the amendments to the IBBI
(CIRP) Regulations.
95


132. In this regard, it will be relevant to refer to Regulation
38(1)(b) of the said Regulations as it stood before the
amendments, and at the time of submission of the Resolution
Plan by the SRA – JSW, which reads thus:
“38. Mandatory contents of the resolution plan .
1. ………
(a)…
(b) liquidation value due to operational creditors
and provide for such payment in priority to any
financial creditor which shall in any event be made
before the expiry of thirty days after the approval
of a resolution plan by the Adjudicating Authority;
and
(c)…..”


133. The original Regulation thus mandated that the
Resolution Plan must contain provisions to pay the
liquidation value due to the OCs in priority over the FCs. The
SRA – JSW had formulated the Resolution Plan as per this
original Regulation and had submitted it to the CoC for
consideration.
th
134. Only thereafter, the amendment dated 5 October
2018 was brought in, which amended Regulation 38(1). The
amended Regulation reads thus:

96


“ 38. Mandatory contents of the resolution plan.

………..”

135.
The amended Regulation mandated that any
amount due to the OCs under a Resolution Plan would be
given priority over the FCs. The term “liquidation value” was
done away with by way of the aforesaid amendment.
136. When this amendment was brought in, the
Resolution Plan was yet to be approved by the CoC.
Considering this amendment, the SRA – JSW issued an
th
addendum dated 10 October 2018 which amended Clause
1.4(ii) of the Resolution Plan. It was stated that other than the
liquidation value due to the workmen of Rs. 9.86 crore, the
liquidation value due to the OCs is nil. It was further stated
that the SRA – JSW is proposing to make an additional
payment to the OCs despite they having no entitlement as per
the IBC. It was lastly stated that the SRA – JSW was ready to
make further payments to the OCs under the Resolution Plan,
if the NCLT directs so.
97


137. After considering the addendum to the Resolution
Plan, the CoC approved the amended Resolution Plan. The RP
then submitted the Resolution Plan to the NCLT, and the
th
Resolution Plan was duly approved on 5 September 2019.
138. After approval by the NCLT, Regulation 38(1) of the
th
IBBI (CIRP) Regulations was again amended on 27 November
2019. This amended form of the Regulation, which still stands
reads thus:
“ 38. Mandatory contents of the resolution plan.
(1) The amount payable under a resolution plan -
(a)to the operational creditors shall be paid in
priority over financial creditors; and
…………”

139. It can thus be seen that the Regulation after its latest
amendment states that any amount payable under the
Resolution Plan shall be paid to the OCs in priority to the FCs.
140. We are of the considered view that the latest
th
amendment dated 27 November 2019 can have no bearing
on the present matter as the same has been enacted after
th
approval of the Resolution Plan by the NCLT on 5 September
2019. Furthermore, it is trite law that unless an amendment
98


explicitly provides for retrospective application, the same
cannot be applied retrospectively.
141. Regarding the contention of the Appellant – erstwhile
promoters that the OCs were paid after the FCs in
contravention of the Regulations, we must examine the
th
amendment dated 5 October 2018. This amendment clearly
stated that the OCs are to be paid the amount due as per the
Resolution Plan in priority over the FCs.
142. As per the Resolution Plan including the addendum
issued by the SRA – JSW, the amount due to the OCs was nil,
as the claims raised by the FCs were far in excess of the
liquidation value of the Corporate Debtor. However, the SRA –
JSW had proposed an ex – gratia payment to the OCs to the
tune of 50% of their claims (Rs. 350 crore). The SRA – JSW
had further stated that it would pay additional amounts, if so
directed by the NCLT. In that view of the matter, we find that
the payments that were made by the SRA – JSW to the OCs
after the FCs in the present matter is not in contravention of
law. The payments made to the OCs in the present matter are
not amounts due as per the Resolution Plan and are
ex –
gratia payments. We do not wish to go into the question as to
99


th
whether the latest amendment dated 27 November 2019
would mandate even such ex – gratia payments to the OCs
being made before the payments to the FCs as we have
categorically held that the latest amendment would have no
effect on the Resolution Plan in the present case inasmuch as
th
the same was approved by the NCLT on 5 September 2019
th
i.e. before the amendment dated 27 November 2019 came
into effect.
143. It is also to be noted that the said issue has not been
raised by any of the OCs of the Corporate Debtor either before
the NCLT or before the NCLAT. It is only sought to be raised
by the erstwhile promoters-cum-directors. We therefore find
that the erstwhile promoters-cum-directors are not directly
concerned with the said issue and a contention in that regard
on their behalf, in our view, is not merited and liable to be
rejected.
h. Upfront infusion of funds by the SRA – JSW

144. The Appellants – erstwhile promoters have also
raised the contention that the SRA – JSW has not honoured
its commitment of “upfront infusion of funds” as per the
Resolution Plan submitted by it. It is submitted by the
100


appellants that a total upfront commitment of Rs. 8,550 crore
as equity was made by the SRA – JSW as per Schedule 3 of
the Resolution Plan. It is submitted that however only Rs. 100
crore out of the said Rs. 8,550 crore was infused by the SRA –
JSW. It is submitted that on the basis of this upfront infusion
of funds, the SRA – JSW got additional marks and crossed the
score of the next highest bidder (Tata Steel) and since this
infusion has not been made, the Resolution Plan has not been
fully implemented. Per contra , the SRA – JSW submitted that
the entire amount of the remaining commitment was brought
in by way of CCDs. It is further submitted that the CCDs are
to be treated the same as equity instruments and therefore,
the obligation for the upfront infusion of funds has been
complied with as per the Resolution Plan. It is also submitted
by the SRA – JSW that this Court need not go into the issue of
the scoring matrix/marking system as that is the exclusive
domain of the CoC and the “commercial wisdom” of the CoC
cannot be challenged by the erstwhile management.
145. We find that the issue regarding CCDs being
construed as equity instruments or not is no more .
res integra
101


This Court, in Narendra Kumar Maheshwari v. Union of
41
India and Others , has observed thus:
“ 98. Our attention was drawn to Section 2(12) of
the Companies Act under which a debenture need
not be secured at all. In that light the guidelines
should be interpreted. Therefore, it was submitted,
guideline 10, reasonably interpreted, means that
such security should be provided as is customarily
adopted in corporate practice in the matter of
issuing debentures. It has to be borne in mind
that the debentures issued in the present case
are compulsorily convertible. Therefore, no
repayment of principal is really involved. The
question of security becomes relevant for the
purpose of payment of interest on these
debentures and the payment of principal only
in the unlikely event of winding up. The
debentures need not necessarily be secured.
Guidelines do not provide for quantum and nature
of the security. A debenture has been defined to
mean essentially as an acknowledgement of debt,
with a commitment to repay the principal with
interest (Palmer's Company Law , p. 672, 24th
edn.). Reference, in this connection, may be made
to British India Steam Navigation Co. v. IRC [(1881)
7 QBD 165, 172 and 173 : 44 LT 378] . A debenture
may contain charge only on a part of the assets of
the company (Re Colonial Trusts
Corporation [(1879) 15 Ch 465] ) or it may not
contain any charge on any of its assets (See Speyer
Brothers v. IRC [(1907) 1 KB 246] ;
and Lemon v. Austin Friars Investment Trust
Ltd. [(1926) 1 Ch 15] A debenture may, therefore,
be secured or unsecured (Palmer's Company Law ,
p. 675, 24th edn.). An ordinary debenture has to
be distinguished from a ‘mortgage debenture’
which necessarily creates a mortgage on the assets
of a company (See Palmer's Company Law , p. 706).

41
1990 Supp SCC 440
102


A compulsorily convertible debenture does not
postulate any repayment of the principal.
Therefore, it does not constitute a ‘debenture’
in its classic sense. Even a debenture, which is
only convertible at option has been regarded as a
‘hybrid’ debenture by Palmer's Company
In this connection,
Law (para 44.07 at page 676).
reference may be made to the “ Guidelines for
the Protection of Debenture Holders ” issued on
January 14, 1987 which have recognised the
basic distinction between a convertible and a
non-convertible debenture. It is apparent that
these were issued for the purpose of ensuring
the serviceability and repayment of debentures
on time. It has been asserted before us that the
compulsorily convertible debentures in
corporate practice was adopted in India some
time after the year 1984. Wherever the concept
of compulsorily convertible debentures is
involved, the guidelines treat these as “equity”.
This is clear from guideline IV( i ) read with
IV( iii ) of the Guidelines for Issue of Cumulative
Convertible Preference Shares and guidelines 8
and 11 of the Employees Stock Option
Guidelines. These two sets of guidelines clearly
indicate that any instrument which is
compulsorily convertible into shares, is
regarded as a “equity” and not as a loan or debt.
Even a non-convertible debenture need not be
always secured. In fact, modern tendency is to
raise loan by unsecured stock, which does not
create any charge on the assets of the company
( The Encyclopaedia of Forms and Precedents , 4th
edn. Vol. 6 para 17 at pages 1094, 1095 and para
22 at pages 1097-1098). Whenever, however, a
security is created, it is invariably in the form of a
floating charge (See The Encyclopaedia of Forms
and Precedents , 4th edn. Vol. 6 para 25 at page
1099). It follows, therefore, that the secured
debenture almost invariably contains a floating
charge. In addition to the floating charge,
debentures are frequently secured by trust deed
103

(Emphasis supplied)

146. It can be seen that this Court has, in unambiguous
terms, held that “Convertible Debentures” stand on a different
footing than other types of debentures. It has been held that
since CCDs do not involve any repayment and have to be
mandatorily converted into equity shares at the time of
maturity, they must be treated as Equity Instruments.
147. This Court, recently, in IFCI Limited (supra), has
placed reliance on Narendra Kumar Maheshwari (supra)
and observed thus:

(Emphasis supplied)
104


148. It can thus be seen that this Court has reaffirmed its
view that if a CCD is to be compulsorily converted at the time
of maturity, without any obligation of repayment of a debt. It
has been held that it must be treated the same as an equity
instrument. We are therefore of the view that the CCDs infused
by the SRA – JSW are to be treated the same as an equity
infusion.
149. To examine as to whether the commitment for the
upfront infusion was actually satisfied by the SRA – JSW
through the CCDs, we must also consider the stand of the
CoC. It is submitted by the CoC that the reconstituted Board
th
of the resolved entity – BPSL held a meeting on 26 March
2021 attended by the Steering Committee, i.e., the three
largest FCs of the Corporate Debtor. In the said meeting, the
issuance of CCDs valued at Rs. 8,450 crore to a company
named Piombino Steel Limited, which is a part of the group of
the SRA – JSW was approved. The CCDs issued have a term
of five years after which they are to be mandatorily converted
into equity shareholding. Furthermore, the holders of the
CCDs also have the right to convert the debentures to equity
even during the five – year term. It is submitted by the CoC
105


that in light of this factor, the commitment of upfront infusion
of equity has been duly complied with by the SRA – JSW.
150. Such a stand of the CoC in our view, categorically
depicts the compliance of the SRA – JSW with its commitment
of upfront infusion as per the Resolution Plan. The CCDs
issued satisfy the test of compulsory conversion as laid down
by this Court in the case of Narendra Kumar Maheshwari
(supra) and therefore have to be treated as equity instruments.
151. Not only that but it has been the consistent view of
this Court in a catena of judgments including K. Shashidhar
(supra) that the commercial wisdom of the CoC cannot be
interfered with either by the Adjudicating Authority, the
Appellate Authority or this Court.
152. Therefore, in view of the factual position as well as
the law laid down by this Court with regard to the CCDs being
equivalent to equity instruments and the specific stand of the
CoC, we do not find that there is any merit in the contention
of the appellants in this regard and the same is liable to be
rejected.

106


i. Distribution of EBITDA
153. The next question is with regard to the entitlement
of the lenders to EBITDA.
154.
It is to be noted that, for the first time, after the
st
review petitions were allowed by this Court on 31 July 2025,
th
an additional affidavit has been filed by the CoC dated 7
August 2025 contending that the lenders are entitled to
EBITDA under the Resolution Plan.
155. In this respect, it will be relevant to note that when
the NCLT held that the lenders were entitled to EBITDA, the
same was on the basis of the judgment of the NCLAT in NCLAT
Essar . However, by the time the NCLAT decided the
proceedings in this matter, this Court had delivered its
judgment in Supreme Court Essar .
156. At this stage, it will be apposite to refer to paragraphs
107-108 of the judgment of this Court in Supreme Court
Essar , which read thus:
“ 107. For the same reason, the
CLAT
impugned N judgment [ Standard Chartered
Bank v. Satish Kumar Gupta , 2019 SCC OnLine
NCLAT 388] in holding that claims that may exist
apart from those decided on merits by the
resolution professional and by the Adjudicating
107


Authority/Appellate Tribunal can now be decided
by an appropriate forum in terms of Section 60(6)
of the Code, also militates against the rationale of
Section 31 of the Code. A successful resolution
applicant cannot suddenly be faced with
“undecided” claims after the resolution plan
submitted by him has been accepted as this would
amount to a hydra head popping up which would
throw into uncertainty amounts payable by a
prospective resolution applicant who would
successfully take over the business of the
corporate debtor. All claims must be submitted to
and decided by the resolution professional so that
a prospective resolution applicant knows exactly
what has to be paid in order that it may then take
over and run the business of the corporate debtor.
This the successful resolution applicant does on a
fresh slate, as has been pointed out by us
hereinabove. For these reasons, N CLAT judgment
must also be set aside on this count.
Utilisation of profits of the corporate debtor
during CIRP to pay off creditors
108. The RFP issued in terms of Section 25 of the
Code and consented to by ArcelorMittal and the
Committee of Creditors had provided that
distribution of profits made during the corporate
insolvency process will not go towards payment of
debts of any creditor — see Clause 7 of the first
addendum to the RFP dated 8-2-2018. On this
CLAT
short ground, this part of the judgment of N is
also incorrect.”

157. From the aforesaid, it can be seen that this Court
has, in unequivocal terms, held that a Successful Resolution
Applicant cannot be faced with “undecided” claims after the
Resolution Plan submitted by it has been accepted as that
108


would amount to “hydra heads popping up” which would
throw into uncertainty the amounts payable by a prospective
resolution applicant who would successfully take over the
business of the corporate debtor. This Court has, in
unambiguous terms, held that the RfRP issued in terms of
Section 25 of the IBC and considered by the CoC had provided
that distribution of profits made during the CIRP would not go
towards payment of debts of any creditor. This Court therefore
set aside the judgment of the NCLAT in NCLAT Essar in that
regard.

158. Relying on the judgment of this Court in the case of
Supreme Court Essar , the NCLAT, vide the impugned
judgment and order, held thus:
“ 126. The aforesaid decision having been reversed
by the Hon’ble Supreme Court, we hold that the
distribution on the profit made during the
‘Corporate Insolvency Resolution Process’ should
be made in terms of addendum to the RFP as held
by the Hon’ble Supreme Court.
127. We accordingly, set aside the part of the
conditions as made in Paragraph 128 (j) of the
th
impugned order dated 5 September 2019 which
relates to distribution of profit during the
‘Corporate Insolvency Resolution Process’. The
Monitoring Committee with the help of the
‘Resolution Professional’ will now go through the
RPF issued in terms of Section 25 of the ‘I&B Code’
and as consented to by the ‘Resolution Applicant’
109


(‘JSW Steel Limited’) will make distribution of
profit accordingly. The condition imposed at
paragraph 128(j) stands substituted with the
aforesaid observations.”

159. It is to be noted that the said judgment was not
assailed by the CoC before this Court. Not only that, when the
appeals field by the promoters were first heard and the
appellants sought to raise the ground qua correctness with
regard to treatment of EBITDA by NCLAT, a specific stand
opposing the same was taken by the CoC.
160. It will be relevant to refer to the submissions filed by
the CoC of BPSL before this Court on an affidavit, which read
thus:
“ II. The distribution of EBITDA can only be in
accordance with the law settled by this
Hon’ble Court in the SC Essar Steel Judgment
41. It has been contended by the Appellants that
the EBITDA should be distributed to the creditors
of BPSL as,
(a) The SC Essar Steel Judgment
was passed in the facts of the said case
wherein a specific clause for
distribution of EBTIDA existed in the
process document and hence the said
judgment cannot be made applicable to
the present case, and
(b) The CoC in giving up on the
EBITDA generated had directly
impacted the Appellants.
110


42. Brief background in this regard, is as follows:
(a) Directions by the Hon’ble
NCLT: The NCLT Plan Approval Order
dated 05.09.2019 directed the RP to
redistribute the profits earned by the
Corporate Debtor in accordance with
judgment passed by the Hon’ble NCLAT
in the matter of Standard Charted Bank
v. Satish Kumar Gupta, RP of Essar Steel
Ltd. and Ors. Company Appeal (AT)
(Insolvency) No. 242 of 2019 (“ NCLAT
Essar Judgment ”) dated 04.07.2019
(Para 211) which directed distribution of
profits on a pro-rata basis between the
Financial Creditors and the Operational
Creditors [Para 128 (j) @ Pg. 1026, C.C.
Vol 3]
(b) Impugned Judgment dated
17.02.2020 : The Hon’ble NCLAT
overruled the NCLT Plan Approval Order
by placing reliance on the judgment of
the Hon’ble Supreme Court in
Committee of Creditors of Essar Steel
India Limited v. Satish Kumar Gupta &
Ors., 2019 SCC OnLine SC 1478 dated
15.11.2019 i.e. the SC Essar Steel
Judgment, which overturned the
NCLAT Essar Judgment in respect of
the direction on distribution of profits,
and directed the monitoring committee
with the help of the Resolution
Professional to go through the RFRP
and make distribution of EBITDA
accordingly. [Para 126, 127 @ Pg. 457,
C.C. Vol. 2].
43. In light of the directions contained in the
Impugned Judgment, the lenders of BPSL
convened a meeting on July 04, 2020 to discuss
treatment of EBITDA. Upon consideration of the
terms of the RFRP, it was noted that there is no
provision under the RFRP which required the
111


EBITDA generated in the company during the CIRP
Period, to be distributed amongst the lenders and
therefore, such EBITDA may remain in the
company.
The CoC undertakes to place the minutes of
the meeting of the lenders dated July 4, 2020 on
record in a sealed cover, if called upon / directed
by this Hon’ble Court.
44. In addition to the RFRP issued for BPSL being
silent on distribution of profits during CIRP, it is
relevant to note that the Resolution Plan
contemplates for the SRA to take over the assets
and liabilities of the Corporate Debtor as a ‘going
concern’, which would include the profits or losses
that may be generated by the company during
CIRP. [C.C. Vol. 2 @ Pg. 517 (iv)]
45. To conclude, in view of the fact that,
(a) RFRP was silent on distribution
of EBITDA generated during CIRP, and
(b) the Resolution Plan
contemplated the SRA taking over the
assets and liabilities of BPSL as a ‘going
concern’,
the lenders of BPSL forming part of the Coc, in
compliance of the Impugned Judgment and in
accordance with the law settled under the SC
Essar Steel Judgment, noted that the EBITDA
generated during CIRP may remain with the
company. To this extent, the distribution of
EBITDA generated during CIRP was in accordance
with law.
46. It is also relevant to note that no contrary
stand has been taken by the CoC with respect to
treatment of EBITDA. In this regard, it is stated
that,
(i) the reply affidavit filed by the
CoC in October 2019 before the Hon’ble
NCLAT stating that EBITDA generated
during CIRP should accrue to the
112


benefit of the lenders, was filed at a time
when the NCLAT Essar Steel Judgment
dated 04.07.2019 held the field of law
with respect to distribution of EBITDA
i.e. it should be distributed to the
creditors.
(ii) Pertinently, in the facts of the
said case, there was a specific provision
for appropriation of a portion of the
EBITDA by the CoC in the process
document.
(iii) Subsequently, the SC Essar
Steel Judgment dated 15.11.2019
overturned the NCLAT Essar case, and
held that for distribution of profits,
provisions in the process document
have to be followed.
(iv) In view of the aforesaid
judgment, the Impugned Judgment
dated 17.02.2020 reversed the findings
of the NCLT Plan Approval Order that
relied on the NCLAT Essar Steel
Judgment with respect to distribution of
EBITDA, and directed for the SC Essar
Steel Judgment to be followed.
Accordingly, the monitoring committee
with the help of the Resolution
Professional was directed to go through
the RFRP and make distribution of
EBITDA.
(v) Accordingly, in compliance of
the Impugned Judgment, lenders which
comprised the erstwhile CoC convened
on 04.07.2020 to deliberate on the issue
of EBITDA. It was concluded that since
(i) RFRP is silent on the treatment of
EBITDA; and (ii) in view of the SC Essar
Steel Judgment, EBITDA may be
retained with the Corporate Debtor.
113


As such, it is submitted that the stand of the
lenders comprising the erstwhile CoC with respect
to EBITDA has been in conformity to law and
cannot be said to be contrary to its earlier stand.
47. In view of the aforesaid, it is stated that
distribution of EBTIDA was in accordance with
law.”

161. It can clearly be seen that the CoC had taken a
specific stand that the directions by the NCLT were issued
when the NCLAT Essar was holding the field. It has also taken
a stand that the NCLAT overruled the NCLT directions with
regard to distribution of profit during the CIRP and directed
the Monitoring Committee with the help of the RP to go
through the RfRP and make distribution of EBITDA
accordingly on the basis of the judgment of this Court in
Supreme Court Essar . It has also been specifically stated that
th
after the impugned Judgment and Order of NCLAT dated 17
February 2020 was passed, the lenders of the Corporate
th
Debtor – BPSL had convened a meeting on 4 July 2020 to
discuss the treatment of EBITDA. It has been stated that,
upon consideration of the terms of the RfRP in the said
meeting, it was noted that there was no provision under the
RfRP which required the EBITDA generated in the company
during the CIRP period to be distributed amongst the lenders
114


and therefore it was decided that such EBITDA be retained in
the company. The submissions also show that a specific stand
has been taken that the Resolution Plan contemplates for the
SRA – JSW to take over the assets and liabilities of the
Corporate Debtor as a “going concern”, which would include
the profits and losses that may be generated by the company
during CIRP. The submissions would further show that a
specific stand has been taken that the lenders of the Corporate
Debtor – BPSL forming part of the erstwhile CoC in accordance
with the law settled in the case of Supreme Court Essar had
decided that the EBITDA generated during the CIRP would
remain within the company. As such, the CoC has accepted
the position as laid down by the NCLAT in Supreme Court
Essar .
162. The submissions would clearly show that the stand
taken by the CoC before the NCLAT in this matter with regard
to EBITDA treatment was on the basis of the judgment of the
NCLAT in NCLAT Essar . It has also been specifically stated
that subsequently the Supreme Court Essar overruled the
NCLAT Essar and held that for distribution of profits,
provisions in the process document have to be followed. It has
115


been reiterated on more than one occasion that since the RfRP
was silent on the treatment of EBITDA generated during CIRP
and in view of Supreme Court Essar , EBITDA may be
retained with the Corporate Debtor.
163. When the CoC had taken a specific stand before this
Court in the present appeals and also reiterated the very same
stand when the review petitions were pressed into service, in
our view, it would not be permissible for the CoC to make a
volte face and take a stand which is totally contrary to the one
taken by it before this Court when the appeal was earlier heard
nd
and decided by this Court on 2 May 2025 and when the
st
review petitions were heard and decided on 31 July 2025.
164. It will also be relevant to refer to the following
observations of this Court in the case of Ghanshyam Mishra
and Sons Private Limited (supra) to which one of us (Gavai,
J., as he then was), which read thus:
“ 102.1. That once a resolution plan is duly
approved by the adjudicating authority under sub-
section (1) of Section 31, the claims as provided in
the resolution plan shall stand frozen and will be
binding on the corporate debtor and its employees,
members, creditors, including the Central
Government, any State Government or any local
authority, guarantors and other stakeholders. On
the date of approval of resolution plan by the
116


adjudicating authority, all such claims, which are
not a part of resolution plan, shall stand
extinguished and no person will be entitled to
initiate or continue any proceedings in respect to
a claim, which is not part of the resolution plan.”

165.
The law laid down by this Court in the case of
Ghanshyam Mishra and Sons Private Limited (supra)
has been laid down after considering the earlier judgments
in the cases of Supreme Court Essar (supra), Kalpraj
Dharamshi and Another (supra), Innoventive
42
Industries Limited v. ICICI Bank and Another and
Karad Urban Cooperative Bank Limited v. Swwapnil
43
Bhingardevay and Others .
166. It is pertinent to note that the view taken by this
Court in the case of Ghanshyam Mishra and Sons Private
Limited (supra) has been followed by this Court in the cases
44
of K.N. Rajakumar v. V. Nagarajan and Others , Ruchi
Soya Industries Limited and Others v. Union of India and
45
Others , Greater Noida Industrial Development Authority
46
v. Prabhjit Singh Soni and Another , Vaibhav Goel and

42
(2018) 1 SCC 407

43
(2020) 9 SCC 729

44
(2022) 4 SCC 617

45
(2022) 6 SCC 343
46
(2024) 6 SCC 767
117


Another v. Deputy Commissioner of Income Tax and
47
Another and Electrosteel Steel Ltd. (now ESL Steel Ltd.)
48
v. Ispat Carrier P. Ltd. .
167.
If the stand of the CoC, which is sought to be taken
at this stage, is to be accepted, it will unsettle the position
which has been accepted by this Court that once a Resolution
Plan is duly approved by the Adjudicating Authority under
sub-section (1) of Section 31 of the IBC, the claims as provided
in the Resolution Plan shall stand frozen and will be binding
on the Corporate Debtor, its employees, members, creditors
including the Central Government etc.
168. We are of the considered view that unless there is a
specific provision with regard to distribution of EBITDA in the
RfRP, permitting the CoC to raise a new stand at this stage will
be totally inconsistent with the avowed object for which the
IBC was incorporated.
169. Though it is sought to be urged on behalf of the SRA-
JSW that the Corporate Debtor was running into losses till the
Resolution Plan was implemented, we do not propose to go into

47
2025 SCC OnLine SC 592
48
2025 SCC OnLine SC 829
118


that issue. As already held by us, the scope of interference
against the concurrent findings of fact in the present appeals
would be very limited. No doubt that insofar as EBITDA is
concerned, the findings are not concurrent. It has already
been discussed hereinabove that the directions of the NCLT
with regard to EBITDA treatment were on the basis of NCLAT
Essar whereas the findings of the NCLAT were on the basis of
Supreme Court Essar . We, therefore, do not propose to dwell
into the question as to whether the Corporate Debtor was
running into losses or not. Be that as it may, when a
Resolution Plan is approved, the SRA takes over the
management of the Corporate Debtor with the possibilities of
turning a loss-making concern into a profit earning concern or
the risk of the Corporate Debtor running into further losses.
These decisions fall under the umbrella of “commercial
wisdom” of the CoC. Once the Resolution Plan has been
approved by the CoC and the Adjudicating Authority under
Section 31(2), permitting any claims to be reopened which
were not a part of the RfRP or Resolution Plan, in our view, will
be doing violence to the provisions of IBC. In that view of the
119


matter, the arguments of the CoC as well as the original
promoters in this regard are liable to be rejected.
170. Insofar as the contention of the learned Solicitor
General, appearing on behalf of the CoC with regard to the
additional affidavit being filed by the erstwhile promoter Mr.
Sanjay Singal for adjustment of EBITDA against his personal
guarantees would be giving a cause of action to raise a claim
for EBITDA at this stage is concerned, we find the same also
to be without substance.
171. It is to be noted that the proceedings against the
erstwhile promoters/guarantors under Section 95 of the IBC
have been pending since 2021 and the lenders have been
parties to the said proceedings. The NCLT vide its order dated
th
7 October 2024 has categorically held that the CIRP of the
Corporate Debtor – BPSL and Section 95 proceedings in this
matter were completely independent proceedings. On perusal
of the material on record, it is revealed that this issue was
never raised by the CoC either before this Court in the present
appeal in the first round or during the hearing of the review
petitions. In that view of the matter, permitting the CoC to
raise this issue at this stage of the appeals by way of an
120


th
additional affidavit dated 7 August 2025 would be totally
unjust.
j. Contingent claim of Jaldhi
172.
We now examine the contentions raised by the
Appellant – Jaldhi. It is submitted that the Appellant was the
largest OC of the Corporate Debtor – BPSL and has been
wrongly classified as a “contingent creditor”. It is submitted
that the Appellant holds four international arbitral awards in
its favour and the RP has admitted its claims to the tune of
Rs.1,51,37,57,761.65/-. It is submitted that such a re-
classification of the appellant is against settled law is hugely
detrimental to it as OCs were eligible to 50% of their
crystallized claims whereas contingent creditors were to be
paid only 10% as per the Resolution Plan. Per contra , the SRA
– JSW submitted that Jaldhi has been rightly classified as a
contingent creditor as it has treated itself as a contingent
creditor before the NCLT and had later changed its stance. It
is further submitted that the appellant withdrew various
proceedings filed for enforcement by it before the Calcutta
High Court in order to pursue an alternative remedy and
121


therefore, the foreign awards could not be deemed to be
binding under Indian law.
173. We must firstly examine the stand taken by the
Appellant – Jaldhi before the NCLT from the approval order
th
passed by the NCLT on 5 September 2019.
“106. The contentions raised by Mr. A.S Chadha,
learned senior counsel appointed by the
Adjudicating Authority-NCLT to represent the
cause of Operational Creditors, have been that the
resolution plan has illegally classified 'Jaldhi' as
contingent creditor entitling to be paid only 10 °/o
of its claim subject to a cap of Rs. 35 crores, if it
crystalized within two years from the date of
approval of the resolution plan by the CoC. It is
evident that Jaldhi is an operational creditor and
its claim has been admitted by Resolution
Professional to the extent of Rs. 151.3 crores.
Jaldhi has been maintaining that it has made a
claim of Rs. 151.9 crores on the basis of 3
Arbitration Awards in its favour and against the
corporate debtor and that it has initiated execution
proceeding by filing 3 execution petitions before
Hon'ble High Court of Calcutta. Those proceedings
were pending when the· CIR Process was initiated
on 26.07.2017. Later on, different submissions
were made and it was claimed that its claim is
contingent liability but not an operational debt and
that contingent liability can never be resolved
under a resolution plan. It was thus argued that
the resolution applicant has to assume a risk to
contingent .liability devolving on the corporate
debtor in future. In a separate application filed,
Jaldhi again shifted which is stand by arguing that
although its claim had been admitted by the RP
but the resolution plan categorises its claim has
an identified contingent liability. It was contended
that it is operational creditor and its claim as a
122


contingent liability then it cannot be dealt with 1n
the resolution plan.”

174. It can thus be seen that the stance adopted by the
appellant is varying and inconsistent. On one hand, the
Appellant – Jaldhi had claimed to be a contingent creditor and
raised the contention that its dues could not have been settled
under the Resolution Plan and that SRA – JSW would have to
assume the risk in case the contingent liability crystallizes in
the future. On the other hand, subsequently, the Appellant
shifted its stand and claimed itself to be an OC which was
entitled to equal treatment with other OCs under the
Resolution Plan.
175. Before we examine whether the international arbitral
awards would be treated as contingent or crystallized debts,
we must first examine the status of foreign awards in light of
49
the provisions of the
Arbitration and Conciliation Act, 1996 .
Section 49 of the Arbitration Act reads thus:
“ Section 49: Enforcement of foreign awards.
Where the Court is satisfied that the foreign award
is enforceable under this Chapter, the award shall
be deemed to be a decree of that Court”


49
“Arbitration Act” for short.
123


176. It can thus be seen that the foreign award will be
deemed to be a decree of the court only when the court is
satisfied that the foreign award is enforceable under Part-II
Chapter-I of the Arbitration Act. Therefore, a foreign award
would not be automatically enforceable in India. For it to be
enforceable in India, the court is required to be satisfied that
such an award is enforceable under Part-II Chapter-I of the
Arbitration Act.
177. It is relevant to note that though the appellants had
initiated proceedings for the execution of international arbitral
award in its favour before the Calcutta High Court, the
appellants did not prosecute the said proceedings, and the
said proceedings were dismissed as withdrawn. Had the
appellants pursued the said proceedings before the Calcutta
High Court, the SRA – JSW would have had an opportunity of
contesting the said proceedings. Not permitting the said
proceedings to proceed in accordance with law, in our view,
would not permit the appellants to contend that their claims
had crystalised and settled as OCs entitling them to claim
under the Resolution Plan.
124


178. It is further to be noted that the provisions of the IBC
only differentiate between the OCs and the FCs. This was the
reason that the RP in the present case admitted the claim
raised by the Appellant – Jaldhi as an OC of the Corporate
Debtor. However, after the admission of a claim, the SRA –
JSW had classified the Appellant as a contingent creditor.
Even though such a classification was made by the SRA –
JSW, the same had been duly approved by the CoC who has
the power to sanction the Resolution Plan or enter into
negotiations to modify it prior to its approval. Such a decision
squarely falls under the protected umbrella of the “commercial
wisdom” of the CoC which has been given paramount status
by this Court in the case of K. Sashidhar (supra). It will be
relevant to take note of the relevant paragraphs of the said
judgment which read thus:

125


been enacted, it is noticed that a completely new
approach has been adopted for speeding up the
recovery of the debt due from the defaulting
companies. In the new approach, there is a calm
period followed by a swift resolution process to be
completed within 270 days (outer limit) failing
which, initiation of liquidation process has been
made inevitable and mandatory. In the earlier
regime, the corporate debtor could indefinitely
continue to enjoy the protection given under
Section 22 of the Sick Industrial Companies Act,
1985 or under other such enactments which has
now been forsaken. Besides, the commercial
wisdom of CoC has been given paramount status
without any judicial intervention, for ensuring
completion of the stated processes within the
timelines prescribed by the I&B Code. There is an
intrinsic assumption that financial creditors are
fully informed about the viability of the corporate
debtor and feasibility of the proposed resolution
plan. They act on the basis of thorough
examination of the proposed resolution plan and
assessment made by their team of experts. The
opinion on the subject-matter expressed by them
after due deliberations in CoC meetings through
voting, as per voting shares, is a collective
business decision. The legislature, consciously,
has not provided any ground to challenge the
“commercial wisdom” of the individual
financial creditors or their collective decision
before the adjudicating authority. That is made
non-justiciable.
53. ….…..
54. …..….
55. Whereas, the discretion of the adjudicating
authority (NCLT) is circumscribed by Section
31 limited to scrutiny of the resolution plan “as
approved” by the requisite per cent of voting
share of financial creditors. Even in that
enquiry, the grounds on which the adjudicating
authority can reject the resolution plan is in
reference to matters specified in Section 30(2),
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when the resolution plan does not conform to
the stated requirements. Reverting to Section
30(2), the enquiry to be done is in respect of
whether the resolution plan provides : ( i ) the
payment of insolvency resolution process costs in
a specified manner in priority to the repayment of
other debts of the corporate debtor, ( ii ) the
repayment of the debts of operational creditors in
prescribed manner, ( iii ) the management of the
affairs of the corporate debtor, ( iv ) the
implementation and supervision of the resolution
plan, ( v ) does not contravene any of the provisions
of the law for the time being in force, ( vi ) conforms
to such other requirements as may be specified by
the Board. The Board referred to is established
under Section 188 of the I&B Code. The powers
and functions of the Board have been delineated in
Section 196 of the I&B Code. None of the
specified functions of the Board, directly or
indirectly, pertain to regulating the manner in
which the financial creditors ought to or ought
not to exercise their commercial wisdom
during the voting on the resolution plan under
Section 30(4) of the I&B Code. The subjective
satisfaction of the financial creditors at the time of
voting is bound to be a mixed baggage of variety of
factors. To wit, the feasibility and viability of the
proposed resolution plan and including their
perceptions about the general capability of the
resolution applicant to translate the projected plan
into a reality. The resolution applicant may have
given projections backed by normative data but
still in the opinion of the dissenting financial
creditors, it would not be free from being
speculative. These aspects are completely within
the domain of the financial creditors who are called
upon to vote on the resolution plan under Section
30(4) of the I&B Code.
56. …….……
57. …….……
58. Indubitably, the inquiry in such an appeal
would be limited to the power exercisable by the
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resolution plan, de jure , entails in its deemed
rejection.
60. ………..
61. ………..
62. The argument, though attractive at the
first blush, but if accepted, would require us to
rewrite the provisions of the I&B Code. It would
also result in doing violence to the legislative
intent of having consciously not stipulated that
as a ground — to challenge the commercial
wisdom of the minority (dissenting) financial
creditors. Concededly, the process of resolution
plan is necessitated in respect of corporate debtors
in whom their financial creditors have lost hope of
recovery and who have turned into non-performer
or a chronic defaulter. The fact that the corporate
debtor concerned was still able to carry on its
business activities does not obligate the financial
creditors to postpone the recovery of the debt due
or to prolong their losses indefinitely. Be that as it
may, the scope of enquiry and the grounds on
which the decision of “approval” of the resolution
plan by CoC can be interfered with by the
adjudicating authority (NCLT), has been set out in
Section 31(1) read with Section 30(2) and by the
CLAT
Appellate Tribunal (N ) under Section 32 read
with Section 61(3) of the I&B Code. No
corresponding provision has been envisaged by
the legislature to empower the resolution
professional, the adjudicating authority (NCLT)
or for that matter the appellate authority
(N CLAT ), to reverse the “commercial decision”
of CoC much less of the dissenting financial
creditors for not supporting the proposed
resolution plan. Whereas, from the legislative
history there is contra indication that the
commercial or business decisions of the
financial creditors are not open to any judicial
review by the adjudicating authority or the
appellate authority. ”
(Emphasis supplied)

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179. It can thus be seen that this Court has held that the
legislature purposefully did not include a means to challenge
the commercial wisdom exercised by the CoC. This makes a
challenge to the same non – justiciable. It has been further
held that a challenge cannot be raised against the decision
making of the CoC unless and until the grounds for challenge
as given in the Code are satisfied. Any interference in the
paramount objective of the CoC of exercising its commercial
wisdom would amount to the Court rewriting the law and
going against the very objectives of the IBC.

180. We are therefore of the opinion that in the present
matter as well, the CoC exercised its commercial wisdom while
approving the Resolution Plan whereby the Appellant – Jaldhi
was classified as a contingent creditor and such a decision is
deemed to be non – justiciable by this Court in view of K.
Sashidhar (supra) which has been subsequently followed in
a catena of judgments. The NCLT, and the NCLAT have also
approved the Resolution Plan, and in light of the settled
principle of law, we find no question of law being raised by the
Appellant – Jaldhi and therefore, the appeal filed by it is liable
to be dismissed.
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k. Pre-CIRP dues of Medi and Darcl
181. Two OCs of the Corporate Debtor namely Medi and
Darcl have raised contentions regarding their claims by filing
appeals before this Court against the impugned judgment.
Since the contentions raised by these two OCs are similar in
nature, we are dealing with their appeals together.
182. It was submitted by the Appellants that they were
promised their payments of pre – CIRP dues by the RP as an
incentive for continuing to do business with the Corporate
Debtor during the CIRP period in order to keep it a ‘going
concern’. It was stated by the learned counsel that after
payments for the pre – CIRP dues were received for 10 months
during the CIRP period, the RP issued a corrigendum and
stated that the payments for the pre – CIRP dues were given
due to a “mistake” committed by the accounting clerk and that
the same would be adjusted towards the services of the
Appellants during the CIRP period. In the said corrigendum, it
was also stated by the RP that the pre – CIRP dues paid to the
Appellants would be treated as per the Resolution Plan. Per
, the RP submitted that the payments made to the
Contra
Appellants were nothing, but a mistake made by an
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accounting clerk and that no pre – CIRP payments were
actually made by the RP. The Appellants have been paid the
amounts for the services rendered by them during the CIRP
and their pre – CIRP dues were to be paid as per the Resolution
Plan. It was submitted that once the NCLT and the NCLAT
have given a similar finding on the issues, no interference by
this Court would be warranted.
183. On perusal of the record, we find that there is
nothing produced by the appellants to show any agreement
with the RP after the CIRP commenced. Even though the RP
admits that payments towards pre – CIRP dues were in fact
made, it is also candidly accepted by the RP that the same was
a mistake on the part of an accounting clerk. Upon discovering
this mistake, the RP had quickly taken steps to mitigate the
same and the payments were adjusted towards the services
rendered by the Appellants during the CIRP period.
184. We further find that there is nothing on record that
shows that the CoC had approved such pre – CIRP payments
and such payments to the appellants find no mention
anywhere in the Resolution Plan. This Court has, time and
again, held through a catena of judgments that any and all
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payments made to creditors relating to the pre – CIRP dues
must be done only in accordance with the Resolution Plan and
with the express agreement of the CoC. Therefore, we do not
find any new question of law being raised through the present
appeals and thus, they are liable to be dismissed.
V. CONCLUSION



185. Before we conclude the present matter, we may just
point out the disastrous results which may have ensued in the
event the contentions raised in the present appeals of the
promoters-cum-directors of the Corporate Debtor were
accepted or if the stand of the CoC with regard to EBITDA was
accepted.

186. On the basis of the details given in RfRP, the
resolution applicants submitted their bids. The RfRP does not
provide for treatment of EBITDA. After a prolonged delay on
account of variety of reasons enumerated hereinabove, the
Resolution Plan was implemented. The Corporate Debtor in
the present case was running into substantial losses which
has now become a profit – making entity earning substantial
profits. The SRA – JSW invested huge amounts in
modernization and expansion of the entity (Corporate Debtor).
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Not only that but thousands of employees have been earning
their livelihood on account of the Corporate Debtor running as
an on-going concern due to the Resolution Plan being
implemented by the SRA – JSW.
187. As such, the very purpose for which the IBC was
enacted—namely, to ensure that the Corporate Debtor
continues as a going concern—has not only been achieved, but
the Corporate Debtor has been transformed from a loss-
making to a profit-making entity. If, after the implementation
of the Resolution Plan, the SRA – JSW has converted a loss-
making entity into the one making profits, can it be penalised
for that? Suppose if instead of the Corporate Debtor being
converted into a profit-making entity, the losses would have
increased, can the Corporate Debtor claim refund of the
amount paid? If we permit the claim not to be part of the
Resolution Plan which has been approved by the CoC and the
NCLT to be raised at such a belated stage, it could open a
Pandora’s Box and the very purpose of the IBC providing
sanctity to the finality of the Resolution Plan duly approved
would stand vitiated.
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188. In any case, the issue is no more res integra . This
Court, in the case of Supreme Court Essar has clearly held
that such could not have been the intention of the legislature
as this would amount to hydra heads popping up after the
approval of the Resolution Plan. It has been categorically held
that the SRA cannot be forced to deal with claims that are not
a part of the RfRP issued in terms of Section 25 of the IBC or
a part of its Resolution Plan.
189. No doubt that if RfRP had specifically dealt with the
manner in which the EBITDA would be distributed, it would
have been a different matter. Admittedly, in the present case,
neither the RfRP nor the Resolution Plan dealt with it.
Permitting the erstwhile promoters or the CoC to raise an
argument in that regard at such a belated stage would amount
to doing violence to the very intention with which the IBC was
enacted.
190. We therefore do not find any merit in the contention
of either the ex-promoters-cum-directors of the Corporate
Debtor or the CoC in that regard. If such a contention is
accepted, it will frustrate the very purpose for which the IBC
came to be enacted.
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191. In that view of the matter, we do not find any merit
in the appeals. The appeals are therefore dismissed. The
th
Impugned Judgment dated 17 February 2020 passed by the
NCLAT is upheld.
192. Pending application(s), if any, shall stand disposed
of in the above terms.













..............................CJI
(B.R. GAVAI)




.............................................J
(SATISH CHANDRA SHARMA)



.............................................J
(K. VINOD CHANDRAN)

NEW DELHI;
SEPTEMBER 26, 2025.

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