1. Summary Box

• Case Title: Kalyani Transco v/s M/s Bhushan Power and Steel Ltd. & Ors.
• Case Number: Civil Appeal No. 1808 of 2020
• Decision Date: May 2nd, 2025
• Bench: 2- Judge, Division Bench
• Final Verdict: Upheld the principle that the use of the phrase “any person aggrieved” indicates that there is no rigid locus standi requirement; Adjudicating Authority-NCLT does not have jurisdiction to review a decision of a Statutory Authority under Prevention of Money Laundering Act, 2002 (PMLA) as such, any such order would be coram non judice (same principle would apply to the Appellate Authority- NCLAT); Non compliance of sections 12, 29A, 30(2), either by the Resolution Professional (RP), Committee of Creditors (CoC) or by the Adjudicating Authority- NCLT would render the Resolution Plan liable to be rejected.
• Key Principle: Object and purpose of the Insolvency and Bankruptcy Code, 2016 (IBC) is required to be achieved through insolvency proceedings- providing time-bound resolution process for financial distress, maximising asset value and balancing the interest of all stakeholders; Orders passed beyond the scope of the IBC would be liable to be quashed and set-aside.

2. Background & Facts

• 04.05.2017- Banking Regulation Act, 1949 was amended to enable Reserve Bank of India (RBI) to issue directions to Indian Banks to mandatorily initiate Corporate Insolvency Resolution Process (CIRP).
• 13.06.2017- RBI vide circular identified 12 big accounts for resolution, infamously known as the “dirty dozen”, which included Bhushan Power & Steel Limited (BPSL), constituting about 25% of total non-performing assets in the country for immediate admission under the IBC.
• 26.07.2017- Petition filed by Punjab National Bank (PNB) before NCLT admitted.
• 28.07.2017- Interim Resolution Professional (IRP) invited claims from all stakeholders.
• Claims admitted by Resolution Professional (RP)- INR 4,72,04,51,78,073.88/- in respect of Financial Creditors & INR 6,21,37,61,735/- in respect of Operational Creditors.
• 01.09.2017- (1st meeting of CoC)- Confirmed appointment of IRP as RP.
• 21.09.2017- Advertisement issued; Prospective Resolution Applicants- JSW, Tata Steel & Liberty House submitted their respective Resolution Plans.
• 14.08.2018- Plans submitted by the Resolution Applicants were evaluated by the CoC and JSW was found to have scored the highest.
• 03.10.2018- JSW submitted a Consolidated Resolution Plan after negotiations between the Core Committee comprising of small group of lenders.
• 05.10.2018- Consolidated Resolution Plan circulated by the the RP to the members of CoC.
• 10.10.2018- RP called for a meeting of CoC for consideration and approval of Consolidated Resolution Plan; Pursuant to the said meeting JSW submitted an addendum letter amending and clarifying certain terms in view of amendments made in the CIRP Regulations, vide Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Fourth Amendment Regulations, 2018. The amended consolidated resolution Plan was circulated to the CoC in the 19th meeting held on the same day.
• 15.10.2018 (5 PM)- 16.10.2015 (5PM)- Amended plan put for e-voting on Central Depository Services (India) Limited (CDSL) and the same was approved by the requisite majority.
• 14.02.2019- RP filed Company Application praying for accepting the aforesaid Resolution Plan submitted by JSW that was approved by the CoC.
• 05.04.2019- CBI registered FIR against BPSL, its Directors and others under sections 120B r/w sections 420, 468, 471, 477A Indian Penal Code, 1860 (IPC) & section 13(2) r/w section 13(1)(d) of the Prevention of Corruption Act, 1988 (PC Act).
• 25.04.2019- On the basis of the aforesaid FIR, Directorate of Enforcement (ED) registered Enforcement Case Information Report (ECIR) for offences under the PMLA, Act.
• 05.09.2019- NCLT vide common judgment approved Resolution Plan of JSW subject to condition nos. (a) to (k) in paragraph 128 and dismissed Company Applications that were filed by the erstwhile directors.
• 10.10.2019- ED passed a provisional attachment order (PAO) provisionally attaching assets of CD-BPSL u/s 5 PMLA after the plan was approved by the NCLT but appeal was pending before the NCLAT.
• Appeal filed by the successful Resolution Applicant- JSW challenging some of the conditions and the PAO. (Company Appeal No. 957 of 2019 u/s 61 IBC)
• 14.10.2019- NCLAT stayed the PAO as well as the Resolution Plan so far it related to payment of creditors.
• 18.12.2019- Supreme Court also stayed the PAO order. It was challenged by the CoC.
• 17.02.2020- NCLAT upheld the judgment passed by the NCLT (05.09.2019) subject to the conditions/ clarifications made by it thereby allowing the company appeal filed by JSW and dismissing other company appeals filed by other stakeholders- Mr. Sanjay Singhal, Kalyani Transco, Jaldhi Overseas, Media Carrier, CJ Darcl Logistics, State of Odisha & others. (Impugned Judgment)
• Being aggrieved by the aforesaid judgment instant appeals were filed by Appellants- Kalyani Transco & others.

3. Legal Issues

• Whether the Appellant would be covered by the phrase “any person aggrieved” as it has been used in section 61 & 62 of the IBC respectively and as such would the instant appeal be maintainable?
• Scope of filing an appeal against an order passed by the NCLT before the NCLAT by an aggrieved person.
• Whether the NCLT or NCLAT can review a decision passed by a Statutory Authority under the PMLA?
• Whether a Resolution Plan can be approved without following the requirements of Sections 12, 29A and 30(2) IBC?

4. Findings & Reasoning

• The Appellant would be covered and as such the instant appeals were held to be maintainable. The aspect of maintainability was also held to be decided when the appeal is admitted and not at the final stage. It was held that the use of the phrase “any person aggrieved” indicates that there is no rigid locus requirement to institute an appeal challenging the order of NCLT before the NCLAT (s. 61 IBC), or an order of NCLAT before the Supreme Court (s. 62 IBC). Any person who is aggrieved by the order may institute an appeal. Once the CIRP is initiated, the proceedings are no longer restricted to any individual Applicant Creditor or to the Corporate Debtor, but rather they become collective proceedings in rem, where all the creditors and the Ex- Directors would be necessary stakeholders. (Reliance was placed on a decision of Three-judge bench in case of Glas Trust Company LLC v/s Byju Raveendran and others)
• The scope of filing an appeal against an order of NCLT before the NCLAT is limited to the conditions mentioned in sub-section 3 of section 61 IBC when appeal is filed against an order approving a Resolution Plan under section 31 IBC and as such JSW could not have filed an appeal before the NCLAT for modification of the conditions that were laid down by the NCLT. JSW could otherwise also not be a person aggrieved as it was it was a successful Resolution Applicant whose Resolution Plan was approved.
• NCLT cannot review a decision passed by a Statutory Authority under the PMLA as such powers of judicial review would fall outside the purview of IBC. NCLAT being an Appellate Authority also cannot exercise any power or jurisdiction beyond section 61 IBC and as such the finding by NCLAT in order dated 17.02.2020 regarding granting immunity from ED against attachment to the assets of the Corporate Debtor of which JSW was a successful Resolution Applicant were held to be coram non judice. (Reliance was placed on case titled as Embassy Property Developments Pvt. Ltd. v/s State of Karnataka) More so, because said issue in view of insertion of new section 32A IBC was pending before the Supreme Court in the SLP’s filed by the CoC against the PAO- NCLAT had passed the aforesaid finding in view of insertion of new section 32A IBC which came into effect on 28.12.2019. [The aforesaid came to be an issue as the PAO was passed after the NCLT had approved the Resolution Plan]
• A Resolution plan cannot be approved by either the Resolution Professional, CoC or the Adjudicating Authority-NCLT until it meets the requirement that are envisaged in sections 12, 29A, and 30(2) IBC as the same are statutory in nature- Firstly, CIRP had to be completed within a period of 270 days i.e. 180 + (90 days extendable by NCLT) (Prior to amendment dated 16.08.2018) as required by section 12 IBC- said condition was not fulfilled- Resolution Plan has to be submitted 15 days prior to the aforesaid maximum period however neither plan submitted nor extension taken- RP even failed to explain in the application for approval of the Resolution Plan as to how the entire CIRP was completed in a time bound manner. Secondly, RP did not certify as to whether Resolution Applicant- JSW was an “eligible” person u/s 29A IBC-Compliance Certificate had to be submitted in the prescribed Form H along with the application seeking approval of the Resolution Plan- It further came to the knowledge of the court that a Joint Venture Agreement (JVA) had been entered between JSW, BPSL and Jai Balaji on 05.03.2008 pursuant to an order Government of India in the matter if joint allocation of Rhone Coking Coal block which made JSW a related party to the Corporate Debtor and as ineligible u/s 29A IBC- Since this fact was suppressed in the Resolution Plan it suggested foul play. Lastly, the Resolution Professional also failed to confirm that the Resolution Plan of JSW met with the requirements as envisaged u/s 30(2) IBC particularly with regard to non-contravention of any provisions of law and with regard to the payment of debts to the operational creditors in priority. (Neither the RP nor the CoC)
• Resultantly- orders dated 05.09.2019 and 17.02.2020 passed by the NCLT and NCLAT were quashed and set aside, Resolution Plan of JSW stood rejected and NCLT was directed to initiate Liquidation Proceedings against the Corporate Debtor- BPSL under Chapter III IBC and in accordance with law.

5. Implications

• Expanded Locus Standi Under IBC:
  The judgment clarifies that “any person aggrieved” under sections 61 and 62 IBC must be interpreted liberally, reinforcing that insolvency proceedings are in rem and affect a broad range of stakeholders.
• Jurisdictional Clarity:
  The ruling affirms that NCLT and NCLAT have no jurisdiction to review or interfere with decisions made by Statutory Authorities under the PMLA, such as PAO’s by the ED. Such decisions lie beyond the IBC framework and are governed by a different statutory regime.
• Mandatory Compliance with IBC Provisions:
  Strict Compliance with Sections 12, 29A and 30(2) is reiterated as essential for the approval of any Resolution Plan. Any non-compliance, procedural or substantive, is ground for automatic rejection of the plan.
• Fraud & Eligibility of Resolution Applicant:
  The concealment of related-party connections (JSW and BPSL through a coal block JVA) and failure to establish eligibility u/s 29A IBC highlighted the importance of transparency and full disclosure in the CIRP. This reinforces the role of the RP and CoC in performing due diligence.
• Significant Precedent Against Overreach by Adjudicating Authorities:
  The decision draws clear boundaries for judicial overreach, holding that NCLAT exceeded its jurisdiction in granting immunity to JSW from ED action, as such that finding was coram non judice.
• Shift Towards Liquidation when CIRP is Flawed:
  By directing liquidation of BPSL, the court has sent a strong signal that non-compliance or procedural irregularities will not be condoned, even in big-ticket resolutions, aligning with the IBC’c goal of transparency, time bound process and stakeholder protection.

6. Comments

• This judgement is a landmark in reasserting the structural integrity and procedural sanctity of the IBC framework.
• It highlights a growing judicial trend toward ensuring accountability of all stakeholders- RP, CoC and Resolution Applicants.
• The ruling also underscores the limited jurisdiction of NCLT/NCLAT in matters that are intersecting with criminal or regulatory domains, thereby fostering institutional discipline among tribunals.
• However, the liquidation of a major company like BPSL- even post an approved plan- may raise concerns over delays and unpredictability in large insolvency cases, possibly deterring future resolution applicants.