Supreme Court Halts Bhushan Power Liquidation Pending JSW Steel's Review Plea

On May 26, the Supreme Court directed that the liquidation procedure of Bhushan Power & Steel Ltd (BPSL), which is now being heard by the National Company Law Tribunal's Delhi bench, remain unchanged. JSW Steel filed a special leave petition, and a bench comprised of Justices BV Nagarathna and Satish Chandra Sharma issued the directive in response.

On May 23, JSW Steel requested a stay to the liquidation proceedings until the firm has exhausted all legal avenues, including filing a review petition against the May 2 Supreme Court order that threw aside its ₹19,700 crore resolution plan for BPSL.

In the current hearing, the Supreme Court observed that since the limitation period to file a review petition is still open, any steps taken by the NCLT in the meantime could create further complications. Therefore, a status quo on the proceedings was necessary until the review process is completed.

The insolvency proceedings against Bhushan Power & Steel began in 2017 after a petition by Punjab National Bank. In 2019, the NCLT approved JSW Steel's resolution plan, which has now been overturned.

JSW Steel, represented by Senior Advocates Neeraj Kishan Kaul and Gopal Jain, argued that the company has until June 2 to file a review petition and requested more time given the complex nature of the case. Kaul highlighted the need to ensure the matter is addressed properly before any irreversible steps are taken.

Solicitor General of India Tushar Mehta, representing the Committee of Creditors, the Insolvency and Bankruptcy Board of India (IBBI), and the Union of India, supported the proposal to defer proceedings in the NCLT. Senior Advocate Pinaki Misra appeared on behalf of BPSL, while Senior Advocate Dhruv Mehta represented the ex-promoters, including Sanjay Singhal.

The legal team for both JSW Steel and BPSL was led by Karanjawala & Co., with coordination among various senior counsels involved in the matter.

Following the court's decision, shares of JSW Steel Ltd rose 2.1% to ₹1,029.40 at 13:54 PM on the National Stock Exchange.