SC reverses verdict on BPSL

THE SUPREME COURT on Friday overturned its earlier decision ordering liquidation of Bhushan Power and Steel (BPSL), restoring approval to JSW Steel's 19,700-crore resolution plan.

- URVI MALVANIA

The bench headed by Chief Justice BR Gavai, along with Justices SC Sharma and K Vinod Chandran, stressed that the commercial wisdom of creditors must be given primacy and not interfered with lightly. It also criticised attempts by erstwhile promoters to stall the proceedings, noting that they had lost control of the company once insolvency was initiated.

The ruling brings an end to months of uncertainty triggered by a two-judge bench verdict on May 2, which had scrapped the JSW plan on grounds of delay in implementation and the use of optionally convertible debentures instead of pure equity for part of the funding.

That order had directed the liquidation of BPSL, even though the resolution had been implemented nearly four years earlier and the company integrated into JSW's operations.

Friday's judgment upheld the plan that had been cleared by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), rejecting objections raised by former promoters and certain creditors. The bench also rejected additional claims amounting to more than 600 crore, raised by the committee of creditors (CoC), after the resolution plan was approved and implemented.