The India Supreme Court has ordered a status quo on the liquidation proceedings [1] of Bhushan Steel & Power Ltd (BPSL), providing JSW Steel an opportunity to file a review petition against the court’s earlier ruling. The decision comes after JSW Steel challenged the Supreme Court’s May 2 verdict, which had rejected its ₹19,700 crore resolution plan for BPSL and directed the company’s liquidation.
A bench comprising Justices BV Nagarathna and Satish Chandra Sharma ruled that maintaining the current status quo was necessary to ensure justice, preventing any immediate liquidation actions before JSW Steel submits its review plea. The court acknowledged that the limitation period for filing the review petition had not yet expired, reinforcing JSW Steel’s right to contest the previous ruling.
JSW Steel had argued that proceeding with liquidation before its review petition was considered would be detrimental to lenders, employees, and the company’s financial interests. The steelmaker had requested a 60-day deferment of the liquidation process, emphasizing the complexity of the matter and the need for adequate time to prepare its legal challenge.
The Supreme Court’s earlier decision to reject JSW Steel’s resolution plan was based on non-compliance with key provisions of the Insolvency and Bankruptcy Code (IBC). The ruling overturned approvals granted by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), stating that the Committee of Creditors (CoC) had erred in accepting the plan.
Following the Supreme Court’s May 2 judgment, former BPSL promoter Sanjay Singhal had approached the NCLT, urging immediate implementation of the liquidation order. However, with the latest ruling, the liquidation process remains on hold until JSW Steel’s review petition is filed and considered.
The case is being closely watched due to its implications for India’s insolvency framework and corporate resolution processes. JSW Steel, which acquired BPSL through insolvency proceedings in 2019, has made substantial investments in the company and is now seeking legal recourse to protect its interests.
Sources :
[1] Supreme Court Orders Status Quo On Liquidation Of Bhushan Steel & Power Ltd To Allow JSW To File Review Petition https://www.livelaw.in/top-stories/justice-yashwant-verma-issue-supreme-court-rejects-rti-application-for-inquiry-report-cjis-letter-to-president-pm-293339