JSW Steel files review petition before Supreme Court against decision to liquidate BPSL

A review petition has been filed by JSW Steel Ltd before the Supreme Court against its May 2nd decision ordering liquidation of Bhushan Power & Steel Ltd (BPSL).

Recently, on May 26th Supreme Court of India ordered status quo in the liquidation proceedings of BPSL as a bench comprising Justice BV Nagarathna and Justice Satish Chandra Sharma heard a plea filed by JSW Steel Ltd, seeking abeyance of any further hearing in applications filed be erstwhile promoter to expedite liquidation proceedings pending before NCLT.

Court had observed that as the limitation period for filing a review petition against the Supreme Court’s earlier judgment dated May 2, 2025 (which rejected JSW’s ₹19,700 crore resolution plan for BPSL) was still running and in light of this a status quo on proceedings before the NCLT was required so that practical ramifications of the judgment may not be further complicated.

The top court in its May 2nd decision had rejected the resolution plan by JSW Steel for the debt-ridden M/s Bhushan Power and Steel Limited, holding that it was not in conformity with the provisions of the Insolvency and Bankruptcy Code, 2016.

A bench of Justices Bela M Trivedi and Satish Chandra Sharma, in exercise of the jurisdiction conferred under Article 142 of the Constitution, had directed the adjudicating authority i.e. the National Company Law Tribunal to initiate the liquidation proceedings against the corporate debtor-BPSL under Chapter III of the IBC and in accordance with law.

The court found JSW did not implement the resolution plan for about two years since its approval by the NCLAT, though there was no legal impediment in implementing the same. Such flagrant violation of the terms of the resolution plan, has frustrated the very object and purpose of the Code, the bench said.

The court noted the mala fide and dishonest intention on the part of JSW, in firstly securing highest score making misrepresentation before CoC and then not implementing the same under the garb of pendency of proceedings, though the resolution plan was supposed to be an unconditional one.

"In our opinion, nobody should be permitted to misuse the process of law nor should be permitted to take undue advantage of the pendency of any proceedings in any Court or Tribunal," the bench said in its judgment rendered on appeals filed by operational creditors Kalyani Transco and others.

The court emphasised, it is needless to say that the resolution plan, after its approval by the adjudicating authority i.e. NCLT under Section 31, is binding not only to the corporate debtor, its employees, members, creditors and the Government authorities but also to all the stakeholders including the successful resolution applicant itself.

In its judgment, the bench said, merely because the Code is silent with regard to the phase of implementation of the resolution plan by the successful resolution applicant, neither the Tribunal nor the Courts should give excessive leeway to the successful resolution applicant to act in flagrant violation of the terms of the resolution plan or in a lackadaisical manner.

The Committee of Creditors had failed to exercise its commercial wisdom while approving the resolution plan of the JSW, which was in absolute contravention of the mandatory provisions of IBC and CIRP regulations. The CoC also had failed to protect the interest of the creditors by taking contradictory stands before this Court, and accepting the payments from JSW without any demurer, and supporting JSW to implement its ill-motivated plan against the interest of the creditors, the bench said.

The successful resolution applicant-JSW, after securing the highest score in the evaluation matrix in the 18th meeting of CoC, submitted the revised consolidated resolution plan with addendum under the garb of complying with the amendments made in the CIRP Regulations, 2016, and got the same approved from the CoC.

However, JSW even after the approval of its plan by the NCLAT, willfully contravened and not complied with the terms of the said approved resolution plan for a period of about two years, which had frustrated the very object and purpose of the IBC, and consequently had vitiated the CIR proceedings of the corporate debtor-BPSL, the bench added.

The court held the impugned judgment passed by the NCLAT in allowing the company appeal of JSW and issuing the directions without any authority of law and without jurisdiction was perverse, coram non judice and liable to be set aside.