When Deadlines Decide Fate: How Kalyani Transco V. BPSL Reinvents The IBC’s Timeline Discipline
- IJLLR Journal
- Jul 23
- 2 min read
Aryavansh Sehgal, Damodaram Sanjivayya National Law University, Visakhapatnam
Introduction
The Supreme Court (SC) decision in the Kalyani Transco v. BPSL, 2025 judgement marks a watershed moment in the restructuring and liquidation jurisprudence of India. SC's strict adherence to procedure as established under the Insolvency and Bankruptcy Code (IBC), 2016 and Corporate Insolvency Regulation Process (CIRP) Regulations highlights it's no tolerance policy for procedural lapses committed by the successful resolution applicant (SRA) i.e. JSW Steel. In October 2018 JSW Steel's plan was approved by the Committee of Creditors (CoC) out of the three resolution plans. The resolution was further sanctioned in September 2019 by the NCLT subject to certain terms and conditions pertaining to monitoring provisions, distribution of CIRP-period earnings before interest, taxes, depreciation, and amortisation (EBITDA) and equity and debenture payments by specified dates. The ostensible deviation from the standard procedure began when the ED attached BPSL's assets under Prevention of Money Laundering Act (PMLA) on October 10, 2019.
In this article we shall discuss the nuances of the regulatory framework of procedures established under IBC through the lens of the judgement: regarding the qualification of person aggrieved, repercussions of timeline violation, RP's failure to file Form H and verify SRA's affidavit, payment-priority breach and the jurisdictional breach of NCLAT.
Timeline of Core Developments
The Reserve Bank of India (RBI) identified BPSL as one of the 12 highly stressed companies in the country, commonly known as the "dirty dozen". This led to the first large-scale application of the IBC, 2016 in India. Consequently, in 2017, the Punjab National Bank filed an application under Section 7 of the IBC, 2016 which led to initiation of CIRP proceedings against BPSL. The IRP invited claims in July 2017 and was approved by the CoC as the RP in October 2017. Three resolution applicants namely JSW, Tata Steel and Liberty House submitted their resolution plans, out of which JSW's plan was approved by the CoC in October 2018. The NCLT (Chennai) approved the plan subject to certain conditions namely, EBITDA accrued during the CIRP proceedings is to be distributed in adherence to the principle laid down in Standard Chartered Bank v. Satish Kumar Gupta, R.P. of Essar Steel Ltd. & Ors , equity and debenture payments to be made by the specified dates and monitoring provisions.
