The Supreme Court on September 26 overturned its own judgment and cleared JSW Steel's Rs 19,700-crore resolution plan for Bhushan Power & Steel (BPSL) and rejected the objections raised by the ex-promoters and certain creditors of BPSL.
A bench led by CJI BR Gavai had re-heard the appeal after recalling the May judgment, which had rejected the resolution plan.
The apex court also junked Bhushan Power lenders' plea seeking share in company's EBITDA.
The apex court held that delay in implementing the resolution plan for Bhushan Power was not attributable to its committee of creditors and successful resolution applicant JSW Steel Ltd.
At 11 am on September 26, JSW Steel shares were trading 0.4% higher at Rs 1,154 apiece.
The committee of creditors (CoC) had sought Rs 3,569 crore in EBITDA and Rs 2,500 crore in delay-related interest, which the apex court rejected on September 26.
"It has been categorically held that the SRA (successful resolution applicant) cannot be forced to deal with claims that are not a part of the RfRP (request for resolution plan) issued in terms of Section 25 of the IBC (Insolvency and Bankruptcy Code, 2016) or a part of its resolution plan," said the bench, also comprising Justices Satish Chandra Sharma and K Vinod Chandran.
On Friday, the court said JSW had revived BPSL by investing heavily in modernisation and safeguarded thousands of livelihoods by keeping the company a going concern.
The purpose of the Insolvency and Bankruptcy Code - to help transform a loss-making entity into a profit-making one - has been achieved, the court said.
A bench headed by former top court judge Bela M Trivedi had on May 2 ordered liquidation of BPSL while setting aside a resolution plan of JSW Steel Limited for the ailing firm.
The CJI-led bench, on July 31, recalled the May 2 verdict that had directed liquidation of BPSL and set aside JSW's resolution plan, criticising the conduct of the CoC, the resolution professional, and the National Company Law Tribunal (NCLT) for what it termed a flagrant violation of the Insolvency and Bankruptcy Code (IBC).
The implementation of the Bhushan Power resolution plan by JSW Steel was significantly delayed, with the payments to financial creditors delayed by 540 days and operational creditors by over 900 days beyond the initially approved timeline.
The National Company Law Tribunal had started insolvency proceedings against Bhushan Power on a petition by Punjab National Bank in 2017 and approved the resolution plan submitted by JSW Steel in 2019.
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