In a dramatic turn at the Supreme Court on Friday, a bench led by Chief Justice B.R. Gavai set aside earlier rulings that had cleared JSW Steel’s massive takeover of Bhushan Power and Steel Limited (BPSL). The Court instead directed that BPSL be sent for liquidation under India’s Insolvency and Bankruptcy Code (IBC).
Background
The insolvency saga began back in 2017 after the Reserve Bank of India identified BPSL as one of the “dirty dozen” high-value defaulters. Over the years, JSW Steel emerged as the highest bidder, pledging more than ₹19,000 crore to revive the debt-ridden steelmaker. The National Company Law Tribunal (NCLT) approved the plan in 2019, and the appellate tribunal (NCLAT) upheld it in 2020. Yet disputes raged on, including enforcement actions by the Enforcement Directorate (ED) and complaints of delayed payments to operational creditors.
Read also: Supreme Court Cancels Bail of Delhi Couple Accused of ₹6 Crore Land Fraud, Orders Fresh Custody
Court’s Observations
The bench minced no words about the time lost. “The Code demands a strict, time-bound resolution. Endless delays erode value,” the Chief Justice remarked during the hearing. The judges also criticised an open-ended clause in JSW’s resolution plan that allowed the lenders’ committee to stretch deadlines, calling it “contrary to the intent of the IBC.”
Lawyers for former promoters argued that JSW delayed implementation to benefit from rising steel prices, while JSW countered that ED attachments caused the holdup. The Court noted that payments to small suppliers lagged by more than two years and questioned the legality of extending implementation without clear statutory backing.
Decision
Pronouncing its order, the Court quashed both the NCLT’s 2019 approval and the NCLAT’s 2020 affirmation. “The resolution plan of JSW is rejected for non-conformity with Section 30(2) read with Section 31(2) of the Code,” the bench stated. It invoked Article 142 of the Constitution to direct the NCLT to commence liquidation of BPSL. All funds already transferred by JSW to creditors will be adjusted according to earlier undertakings.
The judgment closes years of wrangling, sending the once-promising steelmaker toward liquidation and marking a stern reminder that India’s insolvency law leaves little room for delay.
Case Title: Kalyani Transco vs. Bhushan Power and Steel Ltd. & Others
Judgment Date: 2 May 2025 (final decision after review on 11 August 2025)