BPSL case: JSW Steel likely to cite NCLT 2019 order in SC review plea

Business Standard

11-05-2025

JSW Steel is preparing a review petition before India's Supreme Court (SC) after its resolution plan for Bhushan Power & Steel (BPSL) was struck down last month. The steelmaker is expected to cite a 2019 order from the National Company Law Tribunal (NCLT), which acknowledged the resolution professional's submission of Form H — certifying JSW's eligibility under the Insolvency and Bankruptcy Code (IBC).
Separate review petitions will also be filed by the lenders and the resolution professional, people familiar with the matter said.
The top court had invalidated JSW's resolution plan, citing the resolution professional's failure to file Form H and a lack of upfront equity infusion from JSW Steel. The judgment has thrown into uncertainty a high-profile insolvency resolution once hailed as a success under India's bankruptcy framework.
JSW's legal team is likely to argue that the funding structure — based on compulsory convertible preference shares — was effectively an equity infusion, according to a legal source. The review petitions, expected to be filed by the company, its lenders, the resolution professional, and the government, will aim to highlight what they describe as 'errors in the judgment'.
JSW Steel declined to comment.
Senior Advocate Nalin Kohli, speaking on the broader context, said, 'The company not only turned around but also expanded capacity and doubled its workforce — fulfilling the IBC's objectives.' He added that BPSL was among the 'dirty dozen' companies flagged by the Reserve Bank of India in 2017 for fast-track insolvency resolution and that the latest verdict reopens the case after four years of stability.
Sanjay Singhal, the former promoter of Bhushan Power, has already filed an application with the NCLT's New Delhi Bench seeking to enforce the SC order and push the company into liquidation. The move threatens to undo JSW's ₹19,700 crore acquisition and subsequent investments, which increased BPSL's steelmaking capacity from 2.5 million tonnes per annum (mtpa) to 4.5 mtpa.
The SC had found JSW Steel ineligible under Section 29A of the IBC due to an undisclosed joint venture with an entity linked to BPSL's former promoters. It ruled that the resolution professional failed in his statutory duties, including vetting eligibility under the Code.
Bhushan Power, which owes lenders more than ₹47,200 crore, was among the first 12 companies sent for insolvency proceedings under the IBC in 2017. The upcoming legal battle is expected to be protracted, with major financial implications for both lenders and JSW Steel, say legal sources.