The Supreme Court on Monday stayed the liquidation proceedings of Bhushan Power & Steel Ltd (BPSL), which was underway at the National Company Law Tribunal (NCLT), granting temporary relief to JSW Steel.
While the status quo order provides JSW Steel breathing room, it does not guarantee a reversal of the May 2 ruling by the Supreme Court, which had rejected the ₹19,700 crore resolution plan submitted by JSW Steel for BPSL, holding that it failed to comply with Sections 30(2) and 31(2) of the Insolvency and Bankruptcy Code (IBC).
JSW Steel, which had earlier won the bid for BPSL’s assets, approached the top court seeking a review of a previous ruling that could pave the way for liquidation.
Arguing that the legal window to file such a review was still open, JSW urged the court to maintain the status quo until its petition is heard.
A bench of Justice B.V. Nagarathna and Justice Satish Sharma passed the order considering the fact that JSW’s limitation period for filing a review against the Supreme Court’s judgment is not yet over.
Senior Advocate Neeraj Kishan Kaul, representing JSW Steel, told the bench that the time allowed for filing a review petition against the Supreme Court’s earlier judgment, which quashed JSW’s resolution plan for BPSL, had not yet expired. “We have time until June 2 to file the review. It’s a complex matter and will require some time to prepare,” he told the bench.
Despite this, Kaul said the National Company Law Tribunal (NCLT) was moving ahead with steps to appoint a liquidator. “The matter is listed tomorrow before the NCLT. If a liquidator is appointed now, we will be in great difficulty,” he cautioned, adding that BPSL is a profit-making company and the resolution plan in question had been submitted four years ago.
The top court acknowledged these concerns and later ordered a status quo on the liquidation proceedings, granting JSW time to file its review plea and averting the immediate appointment of a liquidator.
This ruling temporarily halts the liquidation of BPSL, giving JSW Steel a crucial opportunity to present its case and potentially safeguard its investment.
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The case is one of the most high-profile under India’s Insolvency and Bankruptcy Code (IBC), involving a multi-billion dollar asset and setting a precedent for how such resolutions are handled. BPSL, once a major steel producer, was dragged into insolvency due to heavy debts, with JSW emerging as a frontrunner in the race to acquire its operations.
“Without observing anything on the merits, we find that the interests of justice would be subserved, and in order to avoid future complications in the matter, if there is a status quo of the proceedings pending before the NCLT. We also record the submission of the ld senior counsel for the appellant that the review petition shall be filed prior to the expiry of the limitation period and in accordance with the law,” the bench noted in its order.
If JSW’s review petition convinces the Supreme Court to reinstate the resolution plan, it will preserve BPSL’s operations and JSW’s investment, reinforcing confidence in the IBC.
