SC restores JSW Steel’s resolution plan for BPSL

The Supreme Court on Friday restored JSW Steel's ₹19,700 crore resolution plan for Bhushan Power & Steel Ltd (BPSL), reversing its own May verdict that directed liquidation of the debt-laden company in a move that removes all uncertainty over the deal, and reiterates the validity of India’s Insolvency and Bankruptcy Code.

- Utkarsh Anand

Inits judgment, the court reaffirmed the sanctity of committee of creditors (CoC) decisions and sought to bring much-needed clarity to one of the most contentious chapters in India’s bankruptcy regime.

Abench led by Chief Justice of India Bhushan R Gavai held that JSW Steel's plan, approved by over 97% of lenders in 2018 and cleared by both the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT), could not be invalidated merely because its implementation was delayed by circumstances beyond the bidder's control.

“The Hon'ble Supreme Court has delivered a landmark judge-

ment concerning one of the largest corporate resolutions in the history of the Insolvency and Bankruptcy Code, 2016 (IBC Code) and has preserved the integrity and sanctity of the IBC Code by upholding the finality of implemented resolution plans by successful resolution applicants,” JSW Steel said in a stock exchange filing.

Dismissing challenges by the company’s erstwhile promoters and lenders, the bench, also comprising justices Satish Chandra Sharma and K Vinod Chandran, acknowledged that Enforcement Directorate’s (ED) attachments of BPSL's assets between 2018 and 2024 created an insurmountable legal obstacle that justified postponement of payments and infusion of equity. “Our experience shows it may not always be possible to implement a resolution plan within the prescribed period. Extension clauses, when approved by 66% of CoC members, are neither open-ended nor indeterminate,” it held.

The ruling ends uncertainty for JSW Steel, which has already integrated BPSL into its operations, expanded capacity at its Jharsuguda plant, and retained thousands of jobs. It also spares the banking system a fresh round of losses, with creditors set to retain the ₹19,350 crore already distributed.