On May 2, 2025, the Supreme Court had rejected JSW Steel’s Rs.19,700 crore resolution plan for BPSL, terming it “illegal.” The ruling also directed that Bhushan Power & Steel be liquidated.
New Delhi: 26th May: The Supreme Court on Monday ordered a status quo on the liquidation proceedings of Bhushan Power and Steel Ltd (BPSL), granting relief to JSW Steel Ltd and allowing the company to file a review petition against the court’s 2 May verdict that quashed its Rs.19,300 crore resolution plan.
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A Bench comprising Justices B.V. Nagarathna and Satish Chandra Sharma passed the stay order while hearing the appeal.
During the hearing, the Senior Counsel representing JSW Steel argued that the company still had time to file a review petition and requested a status quo on liquidation to ensure that the review petition isn’t affected.
The Bench noted:
“Ld senior counsel for the appellant submitted that they have the right to file a review petition and the limitation has not expired. However, as per the direction issued by the Court, the promoters are seeking an expeditious implementation of order. Any implementation will only jeopardise the review petition. We have heard the Ld SG and Senior Counsel for R1. Without expressing any opinion at this juncture, we find the interest of justice will be served if status quo of proceedings pending before NCLT. We clarify that this order status quo will operate the consideration of review petition.”
The Court also added:
“Review petition shall be filed before limitation expires.”
Background
On May 2, 2025, the Supreme Court had rejected JSW Steel’s Rs.19,700 crore resolution plan for BPSL, terming it “illegal.” The ruling also directed that Bhushan Power & Steel be liquidated.
A two-judge Bench, comprising Justice Bela M. Trivedi and Justice Satish Chandra Sharma, had found fault with the Committee of Creditors (CoC) for approving the resolution plan submitted by JSW Steel. According to the Court, the approval was in violation of the Insolvency and Bankruptcy Code (IBC).
JSW Steel was declared the successful resolution applicant back in 2019, when it proposed to pay over Rs. 19,000 crore to the company’s financial creditors. The plan was first approved by the NCLT in September 2019 and later upheld by the National Company Law Appellate Tribunal (NCLAT), despite ongoing legal issues, including concerns raised by the Enforcement Directorate (ED) over the attachment of assets belonging to BPSL.
The case eventually reached the Supreme Court because of delays in the implementation of the resolution plan. The top court observed that JSW Steel had failed to fulfill important post-approval obligations, which goes against the core purpose of the IBC — time-bound resolution and asset value maximisation.
Back in December 2024, the ED decided not to pursue its appeal in the Supreme Court against JSW Steel’s takeover of BPSL. It returned attached properties worth Rs. 4,025 crore to the company, making it easier for JSW to proceed with the acquisition.
The ED returned the properties following the Supreme Court’s order dated December 11, 2024, which directed the agency to hand over the assets after it withdrew its objections under the Prevention of Money Laundering Act (PMLA).
Initially, the ED had attached BPSL’s assets under Section 5 of PMLA because the company’s former promoters were accused of defrauding banks and misusing funds. The Committee of Creditors challenged this move, arguing that such attachment went against the protections offered under the IBC.
Eventually, the ED dropped its opposition, citing the newly added Section 32A of IBC, which came into effect in December 2019. This section provides immunity to corporate debtors and their assets from prosecution or attachment if a resolution plan is approved by the adjudicating authority.
Though the ED had earlier argued that Section 32A should not apply retroactively to the BPSL case, it later revised its position and withdrew its challenge, paving the way for the resolution plan to proceed.
CASE TITLE: JSW STEEL LIMITED v SANJAY SINGHAL AND ORS| Diary No. 29406-2025
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