Introduction

Introduction

The Indian skies, once seemingly boundless with potential, have recently witnessed a few turbulent patches. The insolvencies of Jet Airways and Go First Airways sent ripples of concern through the aviation sector, illuminating the financial tightropes that airlines often walk.

The recent pronouncement by the Supreme Court in Kalyani Transco v. Bhushan Power and Steel Ltd & Ors serves as a stark reminder of the sanctity of IBC, and the perils of procedural laxity and opportunistic manoeuvring. The Apex court not only disapproved of the powers of NCLAT to judicial review over the decision taken by ED under PMLA but also delivered a scathing critique of the entire CIRP of BPSL, ultimately leading to the rejection of JSW Steel’s resolution plan and an order for liquidation.

The Insolvency and Bankruptcy Code, 2016 (“IBC”), was enacted to inter alia provide a consolidated framework to resolve insolvency in a time-bound manner and to maximise the value of assets. This objective is further aided by a moratorium under Section 14 that halts legal proceedings against the corporate debtor, and the immunity provision under Section 32A, which offers a fresh slate to resolution applicants upon plan approval.

The Supreme Court of India’s (“Supreme Court”) decision in the case of Kalyani Transco vs M/s Bhushan Steel and Power Limited1 and connected appeals raises some serious legal issues. We understand from the public domain that parties are considering filing review and curative petitions. Without expressing any views on the judgement, set out below is a summary of the key findings and directions of the Supreme Court.

On 2 May 2025, the Supreme Court delivered its judgment in respect of the corporate insolvency resolution process of Bhushan Power and Steel Limited (“BSPL”). In a very significant ruling, the apex court rejected the resolution plan of JSW Steel Ltd. (“JSW”) for BSPL and directed the liquidation of the corporate debtor, almost five years after the plan had been approved by the Committee of Creditors and the NCLT and the Resolution Plan had been implemented.

Facts and Background

This is the story of the first Indian insolvency proceeding to be granted recognition by the Singapore Court under the UNCITRAL Model Law on Cross-Border Insolvency (“Model Law”). This recognition, besides facilitating the challenging cross-border asset recovery, has also opened the doors for deeper insolvency cooperation between India and Singapore.

In a recent ruling, the Supreme Court of India in Rakesh Bhanot v. Gurdas Agro Private Limited¹ (with connected appeals) (collectively “Appeals”) clarified the scope of the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 (“Code”).

On April 16, 2025, a 3 (three) judge bench of the National Company Law Appellate Tribunal, New Delhi (“NCLAT”) in Shitanshu Bipin Vora vs. Shree Hari Yarns Pvt. Ltd. & Anr. held that clauses of unilateral interest in invoices without a formal agreement, cannot inflate claims of operational debt to meet the threshold of INR 1,00,00,000 (Indian Rupees one crore) under Section 4 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).