Supreme Court Holds Resolution Plan Final Where Request for Plans Is Silent On Profits; Dismisses Challenges To Implementation

A bench of Chief Justice B.R. Gavai and Justices Satish Chandra Sharma and K. Vinod Chandran heard a batch of appeals under Section 62 of the Insolvency and Bankruptcy Code arising from the corporate insolvency resolution process of a large steel company. The appeals by erstwhile promoters and several operational creditors challenged the approval and implementation of the successful resolution plan, raising issues of locus, the continued existence and powers of the Committee of Creditors (CoC) after plan approval, an extension clause for implementation, delay in execution, priority of payments to operational creditors, treatment of EBITDA earned during CIRP, and whether instruments issued by the successful resolution applicant (SRA) qualified as equity.

The Court dismissed the appeals and upheld the National Company Law Appellate Tribunal’s 17 February 2020 order approving the resolution plan. It rejected the promoters’ challenge on locus and found that claims raised were largely questions of fact and commercial judgment reserved to the CoC. The Court affirmed that the CoC continued to exist to supervise implementation until a plan was executed or liquidation ordered, and that judicial interference with the CoC’s “commercial wisdom” was limited. The Court treated compulsorily convertible debentures issued by the SRA as equity in line with precedent, and held that later regulatory amendments on payment priority could not be applied retrospectively to plans approved before those amendments. On EBITDA, the Court reiterated that a successful resolution applicant could not be faced with “undecided” claims after plan approval and that distribution must follow the RfRP and the plan itself rather than post‑hoc claims. The Court, in its reasoning, observed: The Court also recorded the principle that the “commercial wisdom” of the CoC was not open to routine judicial second‑guessing.

Background The dispute dated to the CIRP initiated in 2017 for a large corporate debtor identified among major defaulters. The interim resolution professional invited claims; the CoC evaluated multiple resolution applicants and selected the SRA. The resolution plan (with an addendum) was approved by the CoC and filed before the NCLT, which approved it with conditions on 5 September 2019. Concurrently, criminal and PMLA investigations led to a Provisional Attachment Order by the Enforcement Directorate, and litigation on attachments and prosecution produced interim stays and urgent applications. The NCLAT modified parts of the NCLT order and clarified treatment of EBITDA; the matter reached the Supreme Court with challenges from promoters and operational creditors and with intervention by the CoC and the ED. The Court recorded the CoC’s undertaking in March 2020 that funds received from the SRA would be returned if appeals succeeded. The SRA implemented the plan in March 2021 after the CoC resolved to extend the implementation period and after a sequence of regulatory and enforcement developments; later filings and review petitions brought the issues back for final adjudication. The Supreme Court found that delays in implementation were attributable to a mixture of enforcement proceedings, litigation over plan terms and regulatory uncertainty rather than bad faith by the SRA; it held that the CoC’s decision‑making and commercial assessments — including classification of contingent claims and acceptance of equity via CCDs — fell within its protected domain and that EBITDA distribution must follow the RfRP/resolution plan rather than create fresh liabilities.

Case Details: Case No.: 2025 INSC 1165 (Batch: Civil Appeal Nos. 1808/2020; 2192‑2193/2020; 2225/2020; 3020/2020; 6390/2021) Case Title: Kalyani Transco v. M/s Bhushan Power and Steel Limited and Others (batch of appeals arising from CIRP of the Corporate Debtor) Appearances: For the Petitioner(s): Shri Dhruv Mehta (Senior Counsel), Shri Balbir Singh (Senior Counsel), Shri Arjun Asthana (Counsel), Shri Manu Beri (Counsel) For the Respondent(s): Shri Neeraj Kishan Kaul (Senior Counsel) for the Successful Resolution Applicant, Shri Tushar Mehta (Solicitor General) for the Committee of Creditors, Shri Navin Pahwa (Senior Counsel) for the Resolution Professional, Shri Pinaki Misra (Senior Counsel) for the Resolved Entity

(Reportable judgment delivered 26 September 2025)