Based on the “errors” flagged by legal teams, the Committee of Creditors (CoC) in the BPSL case is expected to file a review petition in the apex court, a top government official told Business Standard.
JSW Steel is also understood to be evaluating all legal options. “A review petition will be filed, but there are certain facts which have not been taken into account in the order which are being analysed,” said a person close to the matter.
The finance ministry has reviewed the matter as well, with senior officials briefing the ministry top brass on Wednesday about the implications of the Court order and the way forward, sources said. The Corporate Affairs ministry has also shared its inputs with respect to the IBC.
A two-judge bench of Justices Bela M Trivedi and Satish Chandra Sharma had held the resolution plan as 'illegal' and 'contrary' to the provisions of the IBC, primarily on two counts. One, a change in the financing structure, by using a mix of equity and optionally convertible debentures (OCDs) as opposed to an equity infusion plan laid out in the resolution plan at the time of evaluation of bids. Second, a breach of the timeline.
While the court held that JSW Steel had not fulfilled its equity obligations, a source said it appears the court didn’t consider JSW’s infusion of money in the form of compulsory convertible debenture as equity infusion.
“Infusion of money by way of compulsory convertible debenture should be considered akin to equity infusion. Compulsorily convertible instruments are widely considered as quasi-equity and could have helped JSW receive its infusion back in the event that BPSL was taken away due to the proceedings under the Prevention of Money Laundering Act (PMLA). This would have not been possible in case the entire money was infused by way of an equity issuance,” the source said.
The government is also studying the sharp observations made by the SC about the resolution professional (RP) overseeing the process. The court had held that the RP had “utterly failed” to discharge his statutory duties under the IBC and the Corporate Insolvency Resolution Process (CIRP) regulations.
Banks must minimise delays in CIRP Filings
The Department of Financial Services (DFS) has urged Public Sector Banks (PSBs) to minimise procedural delays, particularly in filing CIRP applications, to accelerate the resolution of stressed assets under the IBC.
Chairing a high-level review, DFS Secretary M. Nagaraju stressed the need for banks to expedite the admission of cases at the National Company Law Tribunal (NCLT), avoid unnecessary adjournments, and ensure that other recovery channels remain actively pursued alongside the IBC route. Banks were specifically directed to regularly review their top 20 non-performing accounts and to monitor cases where resolution plans have been pending with the CoC for over three months. Banks’ legal teams were also instructed to strongly oppose attempts to stall proceedings on frivolous grounds, underlining the importance of getting stay orders vacated promptly to prevent further delays in the resolution process. Cases pending for admission at the NCLT were also reviewed.
 "JSW steel, Bhushan Power and Steel, IBC, IBC proceeding")