Image Source : Live Law
In a dramatic legal reversal, the Supreme Court of India has recalled its May 2, 2025 judgment that had rejected JSW Steel’s Rs 19,700 crore resolution plan for Bhushan Power and Steel Ltd and ordered its liquidation. The apex court will now hear the matter afresh, citing procedural lapses and misinterpretation of legal precedents in the earlier ruling.
Background and context
- JSW Steel had acquired Bhushan Power and Steel Ltd in 2019 through a resolution plan approved by the National Company Law Tribunal and later upheld by the National Company Law Appellate Tribunal
- The plan involved a payment of Rs 19,700 crore to financial creditors, aimed at reviving the debt-laden company which owed banks nearly Rs 47,000 crore
- In May 2025, the Supreme Court invalidated the resolution plan, citing violations of the Insolvency and Bankruptcy Code and procedural flaws in the approval process
Key highlights from the recall order
- A special bench led by Chief Justice BR Gavai and Justice Satish Chandra Sharma found that the earlier judgment did not correctly consider established legal precedents
- The bench noted that several factual inaccuracies and unargued points were included in the May verdict, warranting a full review
- The court emphasized the need to consider ground realities, including the livelihood of 25,000 employees and the operational turnaround of Bhushan Power under JSW’s management
- The review petitions filed by JSW Steel and financial institutions such as Punjab National Bank and State Bank of India were accepted, with a fresh hearing scheduled for August 7
Legal and commercial implications
- The recall of the judgment reopens the possibility of JSW Steel retaining control of Bhushan Power, which has reportedly become a profitable entity under its stewardship
- The Solicitor General argued that minor procedural breaches should not override the commercial wisdom of the Committee of Creditors, which had unanimously approved the plan
- Senior advocates representing JSW warned that the earlier judgment sent a dangerous signal to investors and resolution applicants, potentially undermining the credibility of the insolvency framework
Industry reaction and broader impact
- Legal experts view the recall as a rare but necessary correction, given the scale of investment and employment involved
- The case has reignited debate around judicial intervention in commercial decisions made under the Insolvency and Bankruptcy Code
- Analysts believe the outcome of the rehearing could set a precedent for future resolution plans and the role of Article 142 in insolvency proceedings
Conclusion
The Supreme Court’s decision to revisit the JSW Steel–Bhushan Power resolution plan marks a pivotal moment in India’s insolvency jurisprudence. As the case heads for a fresh hearing, stakeholders across the legal, financial, and industrial spectrum will be watching closely. The outcome could redefine the balance between judicial oversight and commercial discretion in corporate restructuring.
Sources: The Hindu, LiveLaw, Moneylife, Fortune India
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