SC to revisit order on JSW's Bhushan deal

Hindustan Times

a day ago

The Supreme Court on Thursday recalled its order scrapping JSW Steel's ₹19,700 crore deal in 2021 to acquire Bhushan Power and Steel Limited, noting serious 'error apparent' in the judgment which was decided contrary to settled decisions of the top court. The apex court's Thursday decision also comes as a relief to lenders, including State Bank of India and Punjab National Bank, which filed separate review petitions supporting JSW Steel's position. The May ruling ordered the banks to return
₹ 19,350 crore paid by JSW Steel (HT File)
A bench of Chief Justice of India (CJI) Bhushan R Gavai and justice SC Sharma said, 'Prima facie we are of the view that the impugned judgment [of May 2] does not correctly consider the legal position as laid down by this court. Apart from that, it is pointed out [by CoC and JSW] various incorrect factual submissions have been taken on record, and arguments which were not advanced were considered by the court. We find it a fit case for the judgment under review to be recalled and the matter needs to be heard afresh.' The erstwhile promoters of Bhushan Steel disputed this position.
The order was passed on a review petition filed by JSW Steel. Posting the matter for further hearing on August 7, the top court agreed to hear all sides, including the erstwhile promoters of Bhushan Steel, on all issues.
The May 2 decision — it said he acquisition violated provisions of the Insolvency and Bankruptcy Code (IBC), especially those on timelines — shocked corporate and banking circles; the JSW deal was often cited as a success of IBC, allowing companies that had been run to the ground by their promoters, usually at a great cost to banks that had loaned them money, to be revived under new owners.
The apex court's Thursday decision also comes as a relief to lenders, including State Bank of India and Punjab National Bank, which filed separate review petitions supporting JSW Steel's position. The May ruling ordered the banks to return ₹19,350 crore paid by JSW Steel.
JSW's acquisition was approved by the committee of creditors (CoC), the national company law tribunal (NCLT) and national company law appellate tribunal (NCLAT).
Review petitions are taken up by the court in chambers and only when the court feels satisfied that the case needs to be re-heard, the matter is placed for hearing in open court. On Wednesday, the petition was taken up in chambers and a decision was taken to list it in open court.
Appearing for CoC, solicitor general Tushar Mehta, assisted by a team of lawyers from Cyril Amarchand Mangaldas led by advocate Raunak Dhillon, pointed out that the plan of JSW Steel was approved with a 99% majority. He said that the CoC had presented elaborate minutes of meeting before the court showing detailed discussion on the pros and cons of accepting JSW's plan.
He referred to earlier decisions by the top court on IBC which lay down the law that the courts will not sit in judgment over the commercial wisdom of CoC.
For JSW, senior advocate Neeraj Kishan Kaul, assisted by a team of lawyers from Karanjawala & Co, pointed out that since 2021, the company has been running Bhushan Steel . In the process, it has infused over ₹20,000 crore, cleared all dues incurred by the previous management, and doubled the production of steel. From 18,000 employees, the company's workforce has swelled to 25,000. He added that the judgment of May 2 also has had a debilitating effect on IBC and needs to be set aside.
Mehta told the court that the top court 's May ruling on timelines not being observed were not even argued.
The May 2 judgment was pronounced by a bench of justices Bela M Trivedi (since retired) and SC Sharma, who is the other member on the bench with CJI hearing the review plea.
CJI Gavai said, 'My brother (justice Sharma) has been kind enough to be candid. He has told me that the points argued have not been considered by the judgment. I am grateful to my brother. How could the court go into the issue that was not argued and suggest this is suppressed, that is suppressed.'
The erstwhile promoters of Bhushan Steel represented by senior advocate Dhruv Mehta objected to the submissions made by CoC and JSW. But the SG pointed out that the erstwhile promoters of the company, who landed it in serious serious financial trouble cannot be allowed to raise a finger on the correctness of a plan by which the company stands revived. 'They were part of the dirty dozen that left the company in financial doldrums and now want to drag a successful company into liquidation,' he said.
Shares of JSW rose 1.93% apiece to close the day at ₹1057.90, on a day when BSE's benchmark Sensex closed 0.36% down.