New Delhi, May 2 (PTI) The Supreme Court on Friday set aside the resolution plan submitted by JSW Steel for Bhushan Steel and Power Ltd (BSPL), holding it illegal and in violation of the Insolvency and Bankruptcy Code (IBC).

A bench comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma ordered the liquidation of BSPL under the IBC.

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The top court criticised the conduct of all key stakeholders in the resolution process — the resolution professional, the Committee of Creditors (CoC), and the National Company Law Tribunal (NCLT) — for enabling what it termed a "flagrant violation" of the IBC.

Justice Bela Trivedi, pronouncing the verdict, said the resolution professional failed to perform his statutory duties during the corporate insolvency resolution process, as mandated under the IBC and its associated regulations.

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The bench said the CoC was found to have approved JSW's resolution plan without proper application of its commercial wisdom.

The plan contravened mandatory IBC provisions and did not protect creditors' interests and notably, the CoC accepted payments from JSW without objection, despite the plan's shortcomings, it added.

The verdict declared the orders of September 5, 2019 of the NCLT and the NCLAT judgement of February 17, 2022 as "perverse" and lacking jurisdiction, and consequently set them aside.

The bench rejected the resolution plan of JSW, as approved by the CoC, for being non-compliant with the IBC.

The NCLT was subsequently directed to initiate liquidation proceedings against BSPL under Section 33(1) of the IBC, exercising the Court's powers under Article 142 of the Constitution.

A detailed judgement is awaited.

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