New Delhi, Aug 7 (PTI) The Supreme Court on Thursday commenced hearing afresh a batch of pleas related to its May 2 judgment ordering liquidation of BPSL while setting aside JSW Steel’s resolution plan.

A special bench comprising Chief Justice B R Gavai and Justice Satish Chandra Sharma on July 31 recalled the verdict and decided to hear afresh the pleas in the matter.

A bench headed by former top court judge Bela M Trivedi on May 2 ordered liquidation of Bhushan Power & Steel Limited (BPSL) while setting aside a resolution plan of JSW Steel Limited for the ailing firm.

Solicitor General Tushar Mehta, appearing for the committee of creditors (CoC), said the former promoters of the BPSL had no locus standi in the case as they were the ones who brought the company to dust.” “We are supporting our resolution plan approved by us and NCLT. However, subject to certain conditions being met by the erstwhile promoters,” he said.

The insolvency resolution process (CIRP) for BPSL was initiated by the National Company Law Tribunal (NCLT) in July 2017 and in October 2018, the CoC approved a Rs 19,000 crore resolution plan submitted by JSW Steel.

Mehta said that the resolution plan had already been approved by the CoC and the NCLT, and that further delays were detrimental to creditors.

“The CoC has become a functus officio once the resolution plan is approved. Their role ends there. Now, implementation must proceed,” he added.

Mehta said over Rs 2,500 crore was lost due to delays in implementing the plan.

When the CJI asked about the EBITDA (earnings before interest, tax, depreciation, and amortisation) generated during the CIRP, lawyers clarified it remained within the company and thus should be accounted for when assessing the plan’s viability.

Senior advocate Dhruv Mehta, appearing for the erstwhile promoters, argued the operational profits earned during CIRP ran into thousands of crores and the money must go to the lenders.

He also stressed that if the plan was flawed, a new resolution process should be initiated rather than proceeding with liquidation.

Mehta opposed the submissions and said, “By siphoning off thousands of crores, they are the creators of the problem. Their legal standing is questionable.” The top court is deliberating various issues including whether the CoC's commercial wisdom can be re-evaluated post-approval and the locus standi of erstwhile promoters to challenge the plan.

The top court will resume hearing on August 8.

On July 31, the top court recalled the May 2 verdict.

The CJI-led bench observed the judgment did not "correctly consider the legal position as has been laid down in the catena of judgments".

The May 2 verdict set aside a resolution plan of applicant JSW Steel Limited for BPSL, holding it illegal and in violation of the Insolvency and Bankruptcy Code (IBC).

The verdict criticised the conduct of all key stakeholders in the resolution process, the resolution professional, the CoC and the NCLT for enabling what it termed a "flagrant violation" of the IBC.

JSW Steel was represented by senior advocate Neeraj Kishan Kaul and lawyer Tahira Karanjawala of law firm Karanjawala & Co. PTI SJK SJK AMK AMK

Committee of creditors finality questioned amid rehearing of liquidation and promoter standing over implementation and operational profits. The Supreme Court recalled its prior liquidation order of BPSL and is rehearing challenges arising from the approval and setting aside of JSW Steel's resolution plan, focusing on whether the CoC's commercial wisdom may be re-evaluated after approval, the CoC's functus officio status and obligation to implement the plan, the locus standi of erstwhile promoters to challenge the plan given alleged siphoning, and whether EBITDA and operational profits generated during CIRP must be accounted for in assessing plan viability.