In 2021, JSW Steel emerged as the successful resolution applicant for Bhushan Power & Steel Ltd (BPSL), one of the ‘Big 12’ non-performing assets referred to the Insolvency and Bankruptcy Code (IBC) by the Reserve Bank of India.
The bid, valued at ₹19,350 crore, was accepted against BPSL’s defaulted debt of ₹47,200 crore. This acquisition was seen as a key step in consolidating JSW Steel’s position in the Indian steel sector.
The Supreme Court recently rejected JSW Steel’s resolution plan, raising serious concerns over how the plan was evaluated and approved. According to the apex court, the Committee of Creditors (CoC) “failed to exercise its commercial wisdom” and approved a plan that contradicted mandatory provisions of the IBC and the Corporate Insolvency Resolution Process (CIRP) regulations.
Furthermore, the court criticised the conduct of the Resolution Professional (RP), stating that he had “utterly failed” to discharge his statutory responsibilities. These observations have brought renewed attention to the functioning and accountability within the IBC framework.
Read More: Supreme Court Order Could Send Bhushan Power & Steel Back on the Auction Block.
Sources familiar with the matter have indicated that JSW Steel, led by Sajjan Jindal, will file a review petition challenging the Supreme Court’s verdict. The petition is expected to be filed towards the end of the 30-day review window. At the time of writing, JSW Steel had not issued an official response to media queries on the matter.
The potential implications of the Supreme Court order have prompted concern at the highest levels of government. According to reports, the government is currently consulting with various ministries and departments to assess the broader impact of the ruling. On Tuesday, the Ministry of Corporate Affairs conducted a meeting to deliberate the next steps, emphasising strict adherence to IBC timelines but ruling out any immediate amendments to the Code.
While the Supreme Court upheld the provisions of the IBC, the judgment has brought to light several systemic issues that may hamper the effective implementation of resolution plans. Concerns have been raised that the decision could undermine the confidence of potential resolution applicants and delay future proceedings under the IBC.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: May 7, 2025, 2:40 PM IST
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