A Welcome Recall

SC should penalise those who tried to game the system in the BPSL case, but liquidation is certainly not an option

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The Supreme Court's (SC) decision to recall its May 2 judgment that had ordered the liquidation of Bhushan Power and Steel (BPSL) is a significant positive outcome for the Insolvency and Bankruptcy Code (IBC) and the overall framework for stressed asset resolution in India.

The top court's decision to hear the case afresh on August 7 acknowledges the implications of the earlier judgment on thousands of BPSL workers; on a company that has been turned around to a profitable and healthy going concern; and on investor confidence in the insolvency process.

It's also a realisation on the part of the apex court that on economic and commercial issues, it should consider the unintended consequences of its decisions.

The recall of the order was all the more necessary because of the inordinately long time taken by the apex court itself.

In 2019, the National Company Law Tribunal (NCLT) had approved the acquisition of BPSL as part of the proceedings under the IBC.