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News18
26-05-2025
- Business
- News18
JSW Steel-Bhushan Power & Steel Case: What's The Issue And Why It Matters?
Last Updated: The Supreme Court orders a status quo on the liquidation of Bhushan Power & Steel Ltd, halting NCLT proceedings, thus providing relief to JSW Steel. In a major development that impacts India's corporate and insolvency landscape, the Supreme Court on May 26, 2025, ordered a status quo on the liquidation of Bhushan Power & Steel Ltd (BPSL), halting all further proceedings in the National Company Law Tribunal (NCLT). This case, involving JSW Steel, one of India's leading steelmakers, has been under the spotlight due to its size, legal complexity, and implications for the Insolvency and Bankruptcy Code (IBC). Here's is everything what this case is about and why it's important: What Is the JSW Steel-Bhushan Power Case? Bhushan Power & Steel Ltd, a major player in India's steel sector, defaulted on large bank loans. In 2017, Punjab National Bank initiated insolvency proceedings under the IBC. JSW Steel, one of India's leading steel companies, submitted a Rs 19,700 crore resolution plan in 2019, which was approved by the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT). JSW Steel completed the acquisition in March 2021 and began operating BPSL. What Did the Supreme Court Say on May 2? Four years after the acquisition, the Supreme Court on May 2, 2025, had scrapped JSW Steel's acquisition of BPSL, on the grounds that the resolution plan violated the Insolvency and Bankruptcy Code (IBC). This become a major issue within the industry as it indicated uncertainty in the IBC system despite after years of acquisition. A bench of Justice Bela M Trivedi and Justice Satish Chandra Sharma ruled JSW Steel's resolution plan illegal and a 'flagrant violation" of the IBC, criticising the Resolution Professional, the Committee of Creditors (CoC), and the NCLT. The apex court directed the NCLT to initiate liquidation proceedings while ensuring refunds of payments made to financial and operational creditors, along with JSW's equity contributions, within two months. What Happened on May 26? A separate Supreme Court bench comprising Justice BV Nagarathna and Justice Satish Chandra Sharma on May 26 ordered a status quo on all liquidation proceedings, following a petition by JSW Steel, thus giving respite to JSW Steel that faced uncertainty after the previous SC order. JSW argued it still has time till June 2 to file a review petition. It informed the Supreme Court that it was considering filing a review under Article 137 and requested a pause on any NCLT move to start liquidation until all legal remedies were exhausted. JSW contended that the erstwhile promoters acted in haste and lacked locus standi. The Court agreed that no irreversible steps should be taken during the review period. Why It Matters? The case is one of the landmark cases in the IBC proceedings. This case has become a major issue within the industry as it indicated uncertainty in Insolvency and Bankruptcy Code (IBC), even years after a resolution plan has been fully implemented. JSW Steel had acquired Bhushan Power & Steel following all necessary approvals, yet the Supreme Court's decision on May 2 to reject the resolution plan and order liquidation shook industry confidence. It raised concerns about the finality and enforceability of approved resolution plans, potentially discouraging future bidders and investors from participating in distressed asset deals under the IBC framework. However, the latest May 26 Supreme Court judgment to maintain the status quo has boosted industry confidence. Watch India Pakistan Breaking News on CNN News18. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! First Published: May 26, 2025, 17:35 IST
Economic Times
26-05-2025
- Business
- Economic Times
SC orders status quo on liquidation of Bhushan Power as JSW Steel seeks to halt proceedings
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The Supreme Court on Monday directed parties to maintain status quo on the liquidation of Bhushan Power and Steel Ltd (BPSL), following a plea by JSW Steel to keep the liquidation proceedings in 'abeyance.'JSW argued that initiating liquidation would be 'fatal' to the company and adversely affect other stakeholders, including lenders and workers.A bench of Justices B V Nagarathna and Satish Chandra Sharma said liquidation of the BPSL might jeopardise the review petition, which was to be filed by JSW Steel Limited. "Without expressing any opinion at this stage, we are of the view that it would be in the interest of justice if status quo is maintained on the proceedings pending in NCLT," the bench comes after the apex court had on May 2 rejected JSW's 2019 resolution plan for BPSL citing non-compliance with rules and ordered the unit's liquidation. JSW moved SC after BPSL's former promoter Sanjay Singhal asked the NCLT to start liquidation proceedings and appoint a liquidator. But if the NCLT initiates the process, it will lead to 'complicated litigation to reverse the damage', JSW told the Supreme Court last had said that company is considering a review under Article 137 and requested the Supreme Court to pause any move by the National Company Law Tribunal (NCLT) to start liquidation proceedings until all legal remedies are erstwhile promoters of BPSL have acted in unnecessary haste and without having any locus standi, JSW the hearing, senior counsel N K Kaul, representing JSW Steel, told the court that everyone had asked NCLT to hold on for some time as it is a highly complex matter. The date was preponed from May 30 to May 27. "If a liquidator is appointed then where will I go? We still have time to file a review,' he General Tushar Mehta, representing Committee of Creditors (CoC) said, 'This was a resolution plan implemented 5 years we have [to recover], they will have to return money.' He noted that 'to reverse everything, even they have to give security,' pointing out some lenders involved are foreign banks and a solution must be said that promoters have been filing applications every day in the NCLT. "They have siphoned off Rs 25,00 crore. We have 2 months to pay. This promoter is pressurising the NCLT to take up the matter case every day,' he counsel Dhruv Mehta, appearing for promoter Singhal, said, 'My locus has been accepted by the SC.' He confirmed steps are underway to file a review May 2 ruling scrapped JSW Steel's acquisition of BPSL four years after it took place on the grounds that the resolution plan was 'illegal' and 'in gross violation' of the Insolvency and Bankruptcy Code (IBC).While directing the NCLT to initiate liquidation proceedings against BPSL, the court had directed that payments made to financial and operational creditors and the equity contribution by JSW be refunded within two months, as undertaken by the lenders to the bankrupt told the apex court in its fresh appeal the initiation of liquidation will cause irreparable damage to it and stakeholders at large--public sector banks being the new lenders, new operational creditors and around 20,000 the continuation of NCLT proceedings without addressing and appreciating the legal remedies available to JSW and various other stakeholders would 'frustrate the rights' of JSW, the appeal this could be an attempt at reopening the case, experts told appeal assumes importance as the Committee of Creditors had also asked the tribunal to grant more time to assess the impact of the Supreme Court judgment and assist it on the way forward.
Time of India
26-05-2025
- Business
- Time of India
SC orders status quo on liquidation of Bhushan Power as JSW Steel seeks to halt proceedings
The Supreme Court has ordered a status quo on the liquidation of Bhushan Power and Steel Ltd (BPSL) after JSW Steel's plea to halt the proceedings. JSW Steel argued that liquidation would be detrimental to the company and its stakeholders. The company is considering a review under Article 137, requesting a pause on NCLT's liquidation move. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Supreme Court on Monday directed parties to maintain status quo on the liquidation of Bhushan Power and Steel Ltd (BPSL), following a plea by JSW Steel to keep the liquidation proceedings in 'abeyance.'JSW argued that initiating liquidation would be 'fatal' to the company and adversely affect other stakeholders, including lenders and workers.A bench of Justices B V Nagarathna and Satish Chandra Sharma said liquidation of the BPSL might jeopardise the review petition, which was to be filed by JSW Steel Limited. "Without expressing any opinion at this stage, we are of the view that it would be in the interest of justice if status quo is maintained on the proceedings pending in NCLT," the bench comes after the apex court had on May 2 rejected JSW's 2019 resolution plan for BPSL citing non-compliance with rules and ordered the unit's liquidation. JSW moved SC after BPSL's former promoter Sanjay Singhal asked the NCLT to start liquidation proceedings and appoint a liquidator. But if the NCLT initiates the process, it will lead to 'complicated litigation to reverse the damage', JSW told the Supreme Court last had said that company is considering a review under Article 137 and requested the Supreme Court to pause any move by the National Company Law Tribunal (NCLT) to start liquidation proceedings until all legal remedies are erstwhile promoters of BPSL have acted in unnecessary haste and without having any locus standi, JSW the hearing, senior counsel N K Kaul, representing JSW Steel, told the court that everyone had asked NCLT to hold on for some time as it is a highly complex matter. The date was preponed from May 30 to May 27. "If a liquidator is appointed then where will I go? We still have time to file a review,' he General Tushar Mehta, representing Committee of Creditors (CoC) said, 'This was a resolution plan implemented 5 years we have [to recover], they will have to return money.' He noted that 'to reverse everything, even they have to give security,' pointing out some lenders involved are foreign banks and a solution must be said that promoters have been filing applications every day in the NCLT. "They have siphoned off Rs 25,00 crore. We have 2 months to pay. This promoter is pressurising the NCLT to take up the matter case every day,' he counsel Dhruv Mehta, appearing for promoter Singhal, said, 'My locus has been accepted by the SC.' He confirmed steps are underway to file a review May 2 ruling scrapped JSW Steel's acquisition of BPSL four years after it took place on the grounds that the resolution plan was 'illegal' and 'in gross violation' of the Insolvency and Bankruptcy Code (IBC).While directing the NCLT to initiate liquidation proceedings against BPSL, the court had directed that payments made to financial and operational creditors and the equity contribution by JSW be refunded within two months, as undertaken by the lenders to the bankrupt told the apex court in its fresh appeal the initiation of liquidation will cause irreparable damage to it and stakeholders at large--public sector banks being the new lenders, new operational creditors and around 20,000 the continuation of NCLT proceedings without addressing and appreciating the legal remedies available to JSW and various other stakeholders would 'frustrate the rights' of JSW, the appeal this could be an attempt at reopening the case, experts told appeal assumes importance as the Committee of Creditors had also asked the tribunal to grant more time to assess the impact of the Supreme Court judgment and assist it on the way forward.
Time of India
23-05-2025
- Business
- Time of India
JSW moves SC to halt BPSL liquidation
New Delhi: JSW Steel Friday asked the Supreme Court to keep the liquidation of Bhushan Power and Steel Ltd (BPSL) in 'abeyance' as this will be 'fatal' to the company and other stakeholders, including lenders and workers. Sajjan Jindal-led JSW said it was deciding on its legal recourse of review under Article 137. The company asked that any move by the National Company Law Tribunal (NCLT) to start liquidation proceedings be paused until it had exhausted all legal remedies. ET reported in its Friday edition that JSW Steel was seeking a 60-day pause on BPSL's liquidation. The SC move comes after BPSL's former promoter Sanjay Singhal asked the NCLT to start liquidation proceedings and appoint a liquidator. But if the NCLT initiates the process, it will lead to 'complicated litigation to reverse the damage', JSW told the Supreme Court Friday. The erstwhile promoters of BPSL have acted in unnecessary haste and without having any locus standi, JSW said. The apex court had on May 2 rejected JSW's 2019 resolution plan for BPSL citing non-compliance with rules and ordered the unit's liquidation. It also ordered that money be refunded to JSW. The company said the amount to be refunded was 'yet to be worked out.' JSW told the Supreme Court that BPSL's assets are significantly different from what they were before the resolution plan took effect due to value accretion. 'Any order for initiation of liquidation of BPSL must be passed in respect of BPSL as it stood prior to the date of implementation of the resolution plan,' JSW said in its plea to the Supreme Court. 'Consequently, the actions undertaken by JSW upon and after the implementation of the resolution plan need to be reversed and the position of BPSL and its stakeholders ought to be restored to the position they were in immediately prior to the date of implementation of the resolution plan for any liquidation proceedings to commence.' The court is likely to hear the appeal on Monday as JSW's counsel sought an urgent listing, saying the NCLT is moving 'ahead fast with the liquidation process'. To be sure, the NCLT is also scheduled to hear the Singhal plea on Monday. The May 2 ruling scrapped JSW Steel's acquisition of BPSL four years after it took place on the grounds that the resolution plan was 'illegal' and 'in gross violation' of the Insolvency and Bankruptcy Code (IBC). While directing the NCLT to initiate liquidation proceedings against BPSL, the court had directed that payments made to financial and operational creditors and the equity contribution by JSW be refunded within two months, as undertaken by the lenders to the bankrupt firm. JSW told the apex court in its fresh appeal the initiation of liquidation will cause irreparable damage to it and stakeholders at large--public sector banks being the new lenders, new operational creditors and around 20,000 employees. Therefore, the continuation of NCLT proceedings without addressing and appreciating the legal remedies available to JSW and various other stakeholders would 'frustrate the rights' of JSW, the appeal stated. However, this could be an attempt at reopening the case, experts told ET. JSW's appeal assumes importance as the Committee of Creditors had also asked the tribunal to grant more time to assess the impact of the Supreme Court judgment and assist it on the way forward. Economic Times WhatsApp channel )
