The Supreme Court has finally cleared the way for JSW Steel to acquire Bhushan Power and Steel Ltd (BPSL) in a INR 20,000-crore deal. This ruling reverses its own earlier order that had directed the liquidation of BPSL, ending years of legal battles under the Insolvency and Bankruptcy Code (IBC). The verdict brings much-needed clarity for lenders, creditors, and the steel sector.
Supreme Court’s Final Word
A bench led by Chief Justice of India BR Gavai, along with Justices Satish Chandra Sharma and Vinod Chandran, upheld JSW Steel’s resolution plan worth INR 19,700 crore. The court said JSW met all parameters required as a successful resolution applicant under the IBC.
CJI Gavai noted that overturning the consistent views of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), both of which had already approved the plan, would have caused “a disaster.” The ruling reverses a May 2025 order by another Supreme Court bench that had rejected JSW’s bid and ordered liquidation.
Lenders and Creditors’ Demands
Despite the approval, lenders led by Punjab National Bank raised objections. They sought additional claims worth over INR 6,155 crore, including INR 3,569 crore in EBITDA earned during the insolvency process, interest on delayed payments to financial creditors, and dues to operational creditors.
Solicitor General Tushar Mehta, representing the lenders, argued that fairness required banks to recover these sums, as they deal with public money. However, the court held that once the Committee of Creditors (CoC) approves a plan, it cannot be reopened, as this would undermine the IBC framework.
JSW Steel’s Defense
JSW Steel defended its position, saying that BPSL was still a loss-making company during the resolution process. Its counsel argued that EBITDA could not be distributed unless specifically allowed in the plan. The company warned that accepting creditors’ claims would rewrite settled terms and set a risky precedent.
JSW also pointed out that since taking over operations, it had nearly doubled BPSL’s production capacity from 2.3 million tonnes per annum in 2017 to 4.5 MTPA in 2025. The acquisition, it added, would help strengthen its presence in eastern India and raise overall steel output.
Background of the Case
BPSL’s insolvency process began in 2017 after banks, led by PNB, approached the NCLT over unpaid dues exceeding INR 47,000 crore. JSW Steel emerged as the highest bidder, beating Tata Steel. Though the plan was approved by creditors, the NCLT, and the NCLAT, implementation was delayed by multiple legal challenges, objections from former promoters, and Enforcement Directorate attachments.
Conclusion
The Supreme Court’s latest ruling settles one of the most high-profile cases under the IBC. For JSW Steel, it marks the green light to proceed with a long-awaited acquisition that will boost capacity and market presence. For India’s insolvency system, it reaffirms the principle that commercial wisdom of creditors must prevail, ensuring certainty for future resolutions.
Nitin Konde
Leave a Reply