SC upholds IBC buyout of BPSL by JSW Steel

In a departure from its previous verdict, the Supreme Court on Friday upheld JSW Steel's ₹ 19,700 crore resolution plan for Bhushan Power and Steel Ltd (BPSL), dismissing objections raised by former promoters and some lenders.

- BHAVINI MISHRA

Recalling its earlier order, the apex court said that undoing the plan at this stage, after JSW had infused large sums into the company, would have "disastrous results".

A Bench led by Chief Justice of India B R Gavai, along with Justice Satish Chandra Sharma and Justice K Vinod Chandran, delivered the ruling after recalling the May 2 verdict, which had set aside the plan and ordered BPSL's liquidation.

A Bench of Justice Bela M Trivedi (now retired) and Justice S C Sharma had then held that JSW's resolution plan for BSPL was "illegal" and "contrary" to the provisions of the Insolvency and Bankruptcy Code (IBC), 2016. They had made sharp observations about both the committee of creditors (CoC) of Bhushan Steel and the National Company Law Tribunal (NCLT), saying that they should not have accepted and approved, respectively, the resolution plan.

A CoC is a decision-making body of lenders formed during the insolvency process of a sick company under the IBC.

In a filing to the exchanges, JSW Steel welcomed the verdict and said it reinforced the IBC's integrity and sanctity.