Court holds off decision in JSW-Bhushan Power disagreement following three hearings at the Supreme Court
The Supreme Court of India has put a temporary halt on the liquidation of Bhushan Power and Steel Limited (BPSL) and is reconsidering the rejection of JSW Steel's ₹19,700 crore resolution plan.
The initial judgment, delivered on May 2, 2025, ordered the liquidation of BPSL and rejected JSW Steel's resolution plan due to gross non-compliance with the Insolvency and Bankruptcy Code (IBC). Issues such as non-disclosure of material information, delays in plan implementation, and procedural irregularities were found.
However, the Supreme Court recalled this judgment on August 1-2, 2025, after review petitions were filed by stakeholders. The Court found "errors apparent on the face of the record" and failed to consider important legal precedents, prompting the matter to be reconsidered afresh.
Since then, the Court has heard detailed arguments between August 7 and 11, 2025. These arguments covered various aspects, including JSW Steel's delays, financial performance post-resolution plan approval, the Committee of Creditors' (CoC's) role post-plan approval, the allocation of earnings before interest, tax, depreciation, and amortization (EBITDA), and alleged non-compliance with working capital commitments.
The Court has now reserved its verdict and is expected to deliver a final decision on the review in the near future. The fate of JSW Steel's resolution plan for BPSL hangs in the balance.
Senior Advocate Gopal Jain, representing JSW Steel, argued that subsequent profitability could not justify reopening an approved plan under the IBC. On the other hand, Senior Advocate Neeraj Kishan Kaul, appearing for JSW Steel, argued that the company took over a loss-making entity and had implemented the resolution plan despite delays caused by Enforcement Directorate (ED) attachments.
The Committee of Creditors (CoC), represented by Solicitor General Tushar Mehta and a team from Cyril Amarchand Mangaldas, argued that the CoC's role post-plan approval and the allocation of EBITDA were crucial points. Senior Advocate Dhruv Mehta, appearing for the erstwhile promoters, countered that once a resolution plan is approved by the Adjudicating Authority, the CoC becomes functus officio and cannot revisit or modify it.
The May 2 judgment, made by Justices Bela M Trivedi and Satish Chandra Sharma, had ordered BPSL's liquidation under Article 142 of the Constitution. However, the Court's current reconsideration may lead to a different outcome.
The plan was approved by the National Company Law Tribunal (NCLT) in September 2019 and upheld by the National Company Law Appellate Tribunal (NCLAT). The Enforcement Directorate (ED) challenged the plan citing alleged money laundering by BPSL's former promoters.
JSW Steel, chosen as the successful resolution applicant in 2019, offered over ₹19,000 crore to creditors. The Supreme Court recalled its May 2 judgment on the BPSL liquidation case on July 31, 2025. The Court's current reconsideration is a significant development in the long-running saga of BPSL's insolvency resolution process.
In conclusion, while liquidation was initially ordered, the Supreme Court has currently stayed or set aside that order for reconsideration and is expected to decide the fate of JSW Steel's resolution plan for Bhushan Power in the near future.
The initial order for the liquidation of Bhushan Power and Steel Limited (BPSL) and the rejection of JSW Steel's ₹19,700 crore resolution plan were due to a non-compliance with the Insolvency and Bankruptcy Code (IBC). However, the Supreme Court is currently reconsidering this decision, as it found errors in the initial judgment, including the failure to consider important legal precedents.
The reconsideration of JSW Steel's resolution plan is a significant development in the long-running insolvency resolution process of BPSL, as the Court's final decision on the matter is expected in the near future.
