The government is currently evaluating the Supreme Court’s [1] recent decision that nullified JSW Steel’s ₹19,700 crore resolution plan for Bhushan Power and Steel Ltd (BPSL), according to the Department of Financial Services (DFS). Officials are expected to finalize their approach to the verdict soon.
“We have already reviewed the ruling alongside all involved lenders. A stance has been taken, the judgment has been analyzed, and legal perspectives have been considered,” DFS Secretary M Nagaraju stated. “The government is now determining its course of action in response to the judgment, with a final decision expected shortly.”
On April 2, the Supreme Court dismissed JSW Steel’s resolution plan for BPSL under the corporate insolvency resolution process (CIRP), instead directing the company’s liquidation. The ruling overturned prior approvals from the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). The court determined that the plan did not align with provisions outlined in sections 30(2) and 31(2) of the Insolvency and Bankruptcy Code (IBC). “The resolution plan submitted by JSW and approved by the Committee of Creditors has been rejected,” the judgment declared, instructing the NCLT to begin liquidation proceedings using its suo motu powers under Article 142 of the Constitution.
JSW Steel acquired BPSL in March 2021 through the IBC framework, strengthening its manufacturing presence in Odisha and eastern India. However, with the Supreme Court’s unexpected ruling, the asset’s future and its creditors’ positions have become uncertain. The DFS is likely to consult lenders, legal experts, and the Insolvency and Bankruptcy Board of India (IBBI) before determining whether further legal or legislative measures should be pursued.
Sources:
[1] Govt preparing response to SC verdict on ₹19,700 cr JSW-Bhushan Power deal https://www.business-standard.com/companies/news/jsw-jindal-steel-bpsl-bhushan-power-resolution-supreme-court-government-125050500372_1.html