{"id":3105,"date":"2025-05-29T16:20:14","date_gmt":"2025-05-29T10:50:14","guid":{"rendered":"https:\/\/xpertslegal.com\/blog\/?p=3105"},"modified":"2025-05-29T16:20:14","modified_gmt":"2025-05-29T10:50:14","slug":"sc-reinforces-strict-compliance-with-ibc-no-leeway-for-delays-in-resolution-plan-implementation","status":"publish","type":"post","link":"https:\/\/xpertslegal.com\/blog\/sc-reinforces-strict-compliance-with-ibc-no-leeway-for-delays-in-resolution-plan-implementation\/","title":{"rendered":"SC Reinforces Strict Compliance with IBC: No Leeway for Delays in Resolution Plan Implementation"},"content":{"rendered":"

KALYANI TRANSCO<\/strong> [APPELLANT] Vs. <\/strong>M\/S.BHUSHAN POWER AND STEEL LTD. & ORS<\/strong>. [ RESPONDENTS]<\/h1>\n

CIVIL APPEAL NO. 1808 of 2020<\/p>\n

(2JB, BELA M. TRIVEDI and SATISH CHANDRA SHARMA JJ., delivered by BELA M. TRIVEDI J<\/strong>.)<\/p>\n

 <\/p>\n

In a significant judgment delivered on May 3, 2025, the Supreme Court of India held that the silence of the Insolvency and Bankruptcy Code, 2016 (IBC) regarding the implementation phase of a Resolution Plan does not entitle successful Resolution Applicants to undue leeway. The Court emphasized that neither the National Company Law Tribunal (NCLT) nor the National Company Law Appellate Tribunal (NCLAT) should tolerate non-compliance or delay in implementing approved Resolution Plans.<\/p>\n

This ruling came in response to a series of Civil Appeals, notably by Kalyani Transco\u2014an operational creditor of Bhushan Power and Steel Limited (BPSL)\u2014challenging the NCLAT\u2019s decision to approve a Resolution Plan that had not been implemented for over two years by JSW Steel, the Successful Resolution Applicant (SRA). The Supreme Court set aside the NCLAT’s judgment, sharply criticizing the conduct of JSW and highlighting the broader implications of such delay and non-implementation.<\/p>\n

A two-judge Bench comprising Justice Bela M. Trivedi and Justice Satish Chandra Sharma stated that successful Resolution Applicants must adhere strictly to the terms of the approved plan. The Court observed that the failure to implement the plan, despite the absence of legal obstacles, \u201cfrustrates the very object and purpose\u201d of the IBC. The Resolution Plan, once approved under Section 31 of the IBC, is binding on all parties, including the Corporate Debtor, creditors, government authorities, and notably, the Resolution Applicant.<\/p>\n

The background to the case involves the initiation of Corporate Insolvency Resolution Process (CIRP) against BPSL by Punjab National Bank, leading to the formulation and approval of a Resolution Plan through the Committee of Creditors (CoC). However, complications arose due to criminal investigations by the CBI and Enforcement Directorate (ED), and a change in stance by the CoC, raising questions about its bona fides and alleged misuse of commercial discretion.<\/p>\n

The Supreme Court criticized the CoC\u2019s inconsistent behavior and held that the commercial wisdom of the CoC cannot be a shield for illegality or non-compliance. The Court found that JSW had misrepresented itself to secure approval and later delayed execution under the pretext of pending legal proceedings, revealing mala fide intentions.<\/p>\n

The judgment reaffirms that the legal framework does not permit any party to abuse judicial processes or delay insolvency resolutions. The Court reiterated that any breach of an approved Resolution Plan is prosecutable under Section 74(3) of the IBC, and if no valid plan is received or approved, the Corporate Debtor must be ordered into liquidation under Section 33. Ultimately, the Court allowed the appeals, quashed the earlier orders of the NCLT and NCLAT, and sent a clear message that strict adherence to the IBC process is essential for the integrity of the insolvency regime.<\/p>\n\n","protected":false},"excerpt":{"rendered":"

KALYANI TRANSCO [APPELLANT] Vs. M\/S.BHUSHAN POWER AND STEEL LTD. & ORS. [ RESPONDENTS] CIVIL APPEAL NO. 1808 of 2020 (2JB, BELA M. TRIVEDI and SATISH CHANDRA SHARMA JJ., delivered by BELA M. TRIVEDI J.)   In a significant judgment delivered on May 3, 2025, the Supreme Court of India held that the silence of the […]<\/p>\n","protected":false},"author":1,"featured_media":3107,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-3105","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-judgement"],"_links":{"self":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/3105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/comments?post=3105"}],"version-history":[{"count":2,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/3105\/revisions"}],"predecessor-version":[{"id":3109,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/3105\/revisions\/3109"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media\/3107"}],"wp:attachment":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media?parent=3105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/categories?post=3105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/tags?post=3105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}