SC scraps IBC buyout of Bhushan Power & Steel by JSW Steel

Calls resolution plan 'illegal', orders BPSL's liquidation

- BHAVINI MISHRA & ISHITA AYAN DUTT

The Supreme Court on Friday declared JSW Steel Limited's resolution plan for Bhushan Power & Steel Limited (BPSL) "illegal" and ordered the latter's liquidation, four years after the company was acquired by JSW Steel under the Insolvency and Bankruptcy Code (IBC).

Following the ruling, JSW Steel shares fell sharply. On the BSE, the stock closed at ₹972.15, down 5.46 per cent.

The court's decision came from a two-judge Bench comprising Justices Bela M Trivedi and Satish Chandra Sharma. The Bench held that the resolution plan was "illegal" and "contrary" to the provisions of the IBC.

"The resolution plan of JSW, as approved by the CoC (committee of creditors), did not conform to the requirements in Section 30(2) of the IBC, the same being in flagrant violation of the express provisions of the IBC and CIRP (Corporate Insolvency Resolution Process) regulations. The said resolution plan was liable to be rejected by the NCLT (National Company Law Tribunal) under Section 31(2) at the very first instance. The impugned judgment passed by the NCLAT (National Company Law Appellate Tribunal) is perverse and corum-non-judis and is liable to be set aside," the Bench said.

The CoC, the court further said, "had failed to exercise its commercial wisdom while approving the resolution plan of JSW", which was again in "absolute contravention" of the mandatory provisions of the IBC and CIRP regulations.