JSW Steel’s Last Stand: Supreme Court To Hear Plea On Bhushan Power Liquidation

Updated: May 25, 2025 16:47

Image Source : Business Standard

JSW Steel is set to make a final attempt to halt the liquidation of Bhushan Power and Steel Ltd (BPSL) as the Supreme Court hears its plea on Monday. The steel giant is seeking a review of the court’s May 2 ruling, which quashed its ₹19,300 crore resolution plan and ordered the liquidation of BPSL.

Legal Battle And Review Petition

- JSW Steel’s plea names former BPSL promoter Sanjay Singhal, whose earlier petition led to the Supreme Court’s decision to invalidate the resolution plan.

- The company has requested a 60-day deferment of the liquidation process, arguing that immediate liquidation would disrupt its long-term expansion plans.

- The Supreme Court bench, now comprising Justices B.V. Nagarathna and Satish Chandra Sharma, will hear the case. Justice Nagarathna replaces Justice Bela M. Trivedi, who was part of the original bench but has since retired.

Financial And Operational Impact

- JSW Steel has invested heavily in reviving BPSL, integrating it into its operations with a production capacity of 4.5 million tonnes per annum.

- The company has issued demand notices to banks, seeking refunds for payments made under the now-quashed resolution plan.

- As of March 31, 2024, JSW Steel carried net assets worth ₹14,091 crore related to BPSL on its consolidated balance sheet.

Parallel Proceedings At NCLT

- The National Company Law Tribunal (NCLT) is also set to hear a plea by Sanjay Singhal on Monday, seeking enforcement of the Supreme Court’s liquidation order.

- Singhal has urged the tribunal to initiate immediate liquidation to safeguard BPSL’s assets and prevent potential misuse or diversion.

Industry Implications And Future Outlook

- BPSL was among the first 12 large defaulters identified by the Reserve Bank of India in 2017 under the Insolvency and Bankruptcy Code, with outstanding dues exceeding ₹47,200 crore.

- The Supreme Court’s decision has raised concerns over the sanctity of concluded insolvency resolution deals, potentially impacting future acquisitions under the IBC framework.

- JSW Steel remains hopeful that its compensation rights will be upheld, allowing it to recover investments made in BPSL’s revival.

Sources: MSN, Economic Times, Business Standard, Indian Express, Moneycontrol.

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