SG Tushar Mehta Flags ‘Worst Siphoning’ Before SC In ₹20,000 Cr JSW-Bhushan Deal Row
The Supreme Court on Friday continued hearing a batch of review petitions challenging its recent judgment that quashed the Rs. 20,000 crore resolution plan submitted by JSW Steel for Bhushan Steel and Power Limited (BSPL).
Notably, on July 31, the CJI-led bench had recalled the May 2 verdict and decided to re-hear the matter.
The Bench of Chief Justice BR Gavai, Justice Satish Chandra Sharma, and Justice K. Vinod Chandran is seized of the matter.
Appearing for the Committee of Creditors (CoC), Solicitor General Tushar Mehta strongly defended the CoC's continuing authority post-approval of the resolution plan. “Once a CoC is constituted under Section 21 of the Insolvency and Bankruptcy Code (IBC), it remains in place until proceedings conclude under Section 62. If a body has power to act, that power can be exercised periodically. The CoC’s authority doesn’t vanish just because the resolution plan is approved,” Mehta submitted.
Calling the matter “one of the worst cases of siphoning” he had seen, Mehta criticised attempts to “target the party who has come forward with the best resolution plan”.
On the issue of surplus value in the company, Mehta stated: “When the IRP took over, the company was worth Rs. 1,000 crore. Three years later, it's valued at Rs. 4,000 crore. Who gets the Rs. 3,000 crore increase? The Court must answer that. If the RFRP specified this, the resolution applicant could have quoted accordingly.”
Mehta also defended continued CoC oversight, saying only some members move into the Monitoring Committee post-implementation, and “I’m represented there, so the CoC’s role continues through me.”
During the hearing, a lighter moment unfolded when CJI Gavai remarked, “I’ve decided I won’t accept any post-retirement office.” SG Mehta responded by praising the institutional strength of the Indian Supreme Court. “This is the most powerful court in the world in terms of jurisdiction,” he said. The CJI responded that during a recent visit to London, he was informed of how limited the powers of the UK Supreme Court were, especially regarding judicial review of legislation.
When Senior Advocate Neeraj Kishan Kaul rose to argue for JSW, the CJI asked him to conclude in 30 minutes. Kaul requested an hour, pointing out that the other side had argued for over five hours cumulatively. The Bench agreed to hear him for 30 minutes today and resume the hearing on Monday at 2 PM.
Kaul opened his submissions by stating there was no delay on his part in implementing the plan. “The ED attached certain properties, which the NCLAT later held to be illegal. But the ED persisted with criminal prosecution, insisting that only a PMLA court could lift the attachment. The Supreme Court had to step in and pass a restitution order on December 11, 2024,” he submitted.
He added that the bid was made when the asset was unencumbered, and the ED’s attachment came later. “Who in this country will invest ₹20,000 crore in an asset provisionally attached by the ED? That’s why Section 32A was introduced,” Kaul stressed.
He also questioned the promoter's continued intervention: “This is between the CoC and me. What is the locus of the promoter to argue every possible CIRP issue? If such parties are allowed endless time, what will remain of the IBC framework?”
Kaul concluded by offering a brief financial explainer: “EBITDA is the revenue from the sale of goods minus operating expenses. You deduct the latter from the former to derive EBITDA.”
The matter will now resume on Monday at 2 PM.
On August 7, the Solicitor General Tushar Mehta had claimed that the Enforcement Directorate (ED) has recovered around Rs. 23,000 crore in laundered money and returned it to victims of financial crimes. Mehta clarified that the recovered amount doesn’t remain with the state and is returned to those defrauded in financial crimes.
In another hearing, the CJI led bench on May 22, had strongly criticised the ED's actions, particularly questioning the agency’s authority to initiate proceedings against a government-owned corporation. Senior Advocate Kapil Sibal had alleged gross overreach by the central agency: “All phones of employees were seized, everything cloned. There is something called privacy. They should have investigated first.” Echoing similar concerns, Senior Advocate Mukul Rohatgi had also representing the State, said, “Every employee’s phone was cloned. This is beyond investigative necessity.” Taking serious note, CJI Gavai had observed, “You may register against an individual, but a Corporation? How can you register? Your ED is passing all limits!"
Case Title: Kalyani Transco v. M/S Bhushan Power and Steel Ltd.
Hearing Date: August 8, 2025
Bench: CJI BR Gavai, Justice Satish Chandra Sharma and Justice K. Vinod Chandran