JSW Steel gets another shot at Bhushan Steel as SC agrees to hear case again
In a major relief to JSW Steel, the Supreme Court has agreed to revisit its earlier ruling that cancelled the company’s ₹19,350-crore acquisition of bankrupt Bhushan Power and Steel Ltd (BPSL) and directed its liquidation.
A special bench comprising Chief Justice B.R. Gavai and Justice Satish Chandra Sharma said that the 2 May ruling may have been based on legal errors and that this is a fit case for review.
“Prima facie, we are of the view that the impugned judgement does not correctly consider the legal position as laid down by a catena of judgements. This is a fit case for review,” the bench said, adding that all legal questions would remain open for fresh arguments.
The court will hear the matter again on Thursday, 7 August.
Notably, Justice Sharma was part of the earlier two-judge bench that delivered the 2 May ruling. “Yesterday, I had a discussion with my learned brother (Justice Sharma), who was gracious enough to admit that it requires reconsideration,” said CJI Gavai.
The Chief Justice further noted that the commercial wisdom of the committee of creditors (CoC) must be respected, especially when it has been upheld by both the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). As per settled law, such decisions should not be interfered with lightly, he said.
The court will now hear all petitions afresh, including those filed by dissenting financial creditors such as Kalyani Group’s Torsteel, the state of Odisha, and former BPSL promoter Sanjay Singal, who had challenged the resolution plan, citing delays in its implementation.
In its plea, JSW Steel highlighted that it had significantly improved BPSL’s operations since acquiring it in March 2021. The company stated that BPSL’s production capacity had nearly doubled from 2.3 million tonnes per annum (mtpa) in 2017 to 4.5 mtpa in 2025. Revenue had grown from ₹8,701 crore in FY17 to ₹25,973 crore in FY25, while exports averaged ₹2,976 crore annually over the past four years.
Lawyers welcome the decision
Legal experts also welcomed the court’s decision to entertain the review petition, calling it a positive sign not just for JSW but for the broader Insolvency and Bankruptcy Code (IBC) framework.
“The reasons for accepting the review are certainly a positive hope for JSW,” said Shiv Sapra, partner at Kochhar & Co. “If a favourable outcome follows, it could set a precedent for future cases where tribunals may look beyond technicalities and focus on the IBC’s main objective—reviving a company.”
Ajay Rotti, founder and CEO of tax consulting firm Tax Compaas, said the May judgement sent a dangerous signal and was terrible for the efficacy of the IBC. “Today’s order reinstates the possibility that the JSW-Bhushan Power resolution plan may survive after a full reconsideration,” Rotti said. “It signals a potential shift back toward respecting the commercial decisions made by the CoC during insolvency proceedings, safeguarding the finality and predictability essential to the IBC.”
However, Suman Kumar, vice president-metals and mining at Dolat Capital, sounded a note of caution. “It has definitely inched towards the right direction but since the matter is still sub judice, unless there is a final concrete decision on this matter, it is difficult to say whether it is a positive for JSW Steel,” Kumar said.
JSW Steel closed 1% higher on Thursday on the BSE while the benchmark Sensex fell 0.36%.
What transpired in the hearing
Solicitor general Tushar Mehta, appearing for the Centre, supported JSW’s review plea during the hearing. He argued that while BPSL had fallen into financial crisis due to defaults, it had been turned around post-acquisition.
Mehta questioned whether a minor delay in submitting the resolution plan justified such a drastic consequence. “Is it such a serious violation that it justifies cancelling a resolution plan approved by the CoC?” he asked, highlighting that the company currently employs around 25,000 people and is now financially healthy.
Senior advocate Neeraj Kishan Kaul, representing JSW Steel, questioned how a former promoter, responsible for BPSL’s financial collapse, could be allowed to challenge a resolution plan approved by all key authorities. “This sends a dangerous signal. A valid plan worth ₹20,000 crore has been set aside after five years,” Kaul said, calling the ruling both factually and legally flawed.
He added that important statutory provisions had been ignored and incorrect facts had been taken into account, many of which were not even argued or pleaded.
Kaul noted that JSW had invested nearly ₹30,000 crore into BPSL and the resolution plan had already been implemented.
He said the order had created uncertainty in the IBC process and could have a devastating effect on future resolution plans. “This is a fit case for your lordships to recall the order and hear the matter afresh. Every ground required for review is satisfied in this matter,” Kaul submitted.
The background
JSW Steel acquired Bhushan Power & Steel through the corporate insolvency resolution process (CIRP) that began in July 2017, following pleas by Punjab National Bank and others over unpaid dues exceeding ₹47,000 crore. JSW, offering over ₹19,000 crore, emerged as the successful bidder.
The plan was approved by the CoC in October 2018, NCLT in 2019, and NCLAT in 2020. Although Tata Steel was initially in the fray, JSW outbid it.
The plan faced objections from Sanjay Singal, operational creditors, and the Directorate of Enforcement (ED), which had attached assets. After ED withdrew its objections, the SC ordered asset release in December 2024.
However, dissenting creditors including Kalyani Group’s Torsteel and former promoter Sanjay Singal challenged the resolution plan in the Supreme Court, citing delays in its implementation and leading to the 2 May 2025 ruling that quashed the plan.
The court had held at the time that the acquisition violated key IBC provisions, particularly strict adherence to prescribed timelines, and ordered BPSL’s liquidation under Article 142 of the Constitution. The ruling cancelled the acquisition and also directed banks to return ₹19,350 crore paid by JSW.
BPSL was one of the 12 large corporate defaulters flagged by the Reserve Bank of India in 2017 for resolution under the IBC. At that time, it owed over ₹47,000 crore to its lenders.
Originally published on Live Mint
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