Supreme Court puts Bhushan Steel liquidation on hold, allows JSW to file review plea
The Supreme Court on Monday ordered a status quo on the liquidation proceedings of Bhushan Power and Steel Ltd (BPSL), giving interim relief to JSW Steel.
The verdict came on a plea filed by JSW Steel seeking a stay on the liquidation process initiated by BPSL's former promoter, Sanjay Singhal.
JSW Steel has been allowed to file a review petition against the Supreme Court's May 2 verdict that quashed its Rs 19,300 crore resolution plan, which had come as a major setback for the Sajjan Jindal-led company.
A Supreme Court bench directed the National Company Law Tribunal (NCLT) to put the matter on hold until the apex court passes a verdict on the review plea.
Asking JSW Steel to file the petition within the 30-day prescribed limitation period, the apex court noted that the "status quo needs to be maintained in the interest of justice", meaning no further action on liquidation will proceed until the review petition is resolved.
Sanjay Singhal, former promoter of the BPSL, had approached the NCLT seeking liquidation based on the Supreme Court's earlier judgment.
The Supreme Court's May 2 judgment came as a huge setback for JSW Steel, which acquired the BPSL through the corporate insolvency resolution process more than five years ago and has made significant investments in the company.
The apex court had set aside the resolution plan on grounds of non-compliance with key provisions of the Insolvency and Bankruptcy Code (IBC), which included the failure to adhere strictly to the plan's approved timeline.
BPSL's steel plant in Odisha has a capacity of 4.5 million tonnes per annum (MTPA), forming a key part of JSW Steel's total domestic capacity of 34.2 MTPA.
JSW Steel's Joint Managing Director, Jayant Acharya, said last week that the company had "implemented the resolution plan of the BPSL in compliance with the law and taken steps to successfully revive the company to its present state today". He said that JSW Steel expected its compensation rights to be upheld in the case.
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