Discover how the Supreme Court paused Bhushan Power & Steel Ltd (BPSL) liquidation, giving JSW Steel a shot to revive its ₹19,700 crore plan. Explore the insolvency case, its impact on jobs, creditors, and India’s steel industry, and why this matters for millennials and Gen Z. Stay updated on economic stability and corporate governance.
Introduction
Picture a massive steel company on the edge of collapse, with billions of rupees and thousands of jobs hanging in the balance. That’s the drama of Bhushan Power & Steel Ltd (BPSL), a key player in India’s steel industry. On May 26, 2025, the Supreme Court of India dropped a game-changer, pausing BPSL’s liquidation to let JSW Steel file a review petition for its ₹19,700 crore resolution plan [1]. This follows the court’s May 2, 2025, ruling to nix the plan over serious procedural violations [2]. For millennials and Gen Z, who are all about transparency, economic stability, and real-world impact, this insolvency case is a big deal. Let’s dive into three key angles: the backstory, why the plan got rejected, and what the Supreme Court’s latest move means for the future.
The BPSL Insolvency Case: A Rocky Road
The BPSL saga kicked off in 2017 when the Reserve Bank of India (RBI) flagged it as a major defaulter in its “dirty dozen” list of debt-heavy companies [2]. This triggered the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), starting July 26, 2017, after Punjab National Bank filed a petition [3]. Think of CIRP as a financial lifeline to restructure a struggling company.
JSW Steel stepped up in August 2018, submitting a ₹19,700 crore resolution plan in February 2019. The National Company Law Tribunal (NCLT) greenlit it in September 2019, and the National Company Law Appellate Tribunal (NCLAT) backed it in February 2020 [1]. But on May 2, 2025, the Supreme Court shut it down, ordering liquidation due to procedural failures [2]. Here’s a quick timeline:
| Date | Event |
|---|---|
| June 13, 2017 | RBI identifies BPSL as a major defaulter. |
| July 26, 2017 | NCLT admits insolvency petition by Punjab National Bank. |
| August 2018 | JSW Steel applies as a resolution applicant. |
| February 14, 2019 | JSW submits ₹19,700 crore resolution plan. |
| September 5, 2019 | NCLT approves JSW’s plan. |
| February 17, 2020 | NCLAT upholds NCLT’s approval. |
| May 2, 2025 | Supreme Court quashes plan, orders liquidation. |
| May 26, 2025 | Supreme Court pauses liquidation for JSW’s review petition. |
Why JSW’s Resolution Plan Crashed
The Supreme Court didn’t mince words when it rejected JSW Steel’s plan, calling it a “flagrant violation” of the Insolvency and Bankruptcy Code (IBC) [4]. Here’s the breakdown of why it fell apart:
- Major Delays: JSW dragged its feet, delaying payments to financial creditors by 540 days and operational creditors by 900 days [2]. For Gen Z and millennials, this is like waiting forever for a paycheck unacceptable.
- Lack of Transparency: JSW didn’t disclose a 2008 joint venture with BPSL and Jai Balaji, raising questions about whether they were a “related party” under IBC rules [4]. This secrecy sparked concerns about corporate governance.
- Oversight Failures: The Resolution Professional (RP) and Committee of Creditors (CoC) failed to ensure the plan followed IBC guidelines, missing key checks on feasibility [4].
- IBC Violations: The plan breached IBC Sections 30(2) and 31(2), making it legally invalid [3]. The court even hinted at “dishonest and fraudulent” conduct by JSW, suggesting they tried to bend the rules for profit [4].
Here’s a table summarizing the issues:
| Issue | Details |
|---|---|
| Procedural Delays | Payments delayed by 540–900 days, stalling creditors. |
| Non-Disclosure | Hid 2008 joint venture, raising related party concerns. |
| RP and CoC Failures | Poor oversight by Resolution Professional and Committee of Creditors. |
| IBC Non-Compliance | Violated IBC Sections 30(2) and 31(2). |
Supreme Court’s Latest Move: A Ray of Hope
On May 26, 2025, the Supreme Court issued a “status quo” order, hitting pause on BPSL’s liquidation [1]. This came after JSW Steel argued that liquidating a profit-making company like BPSL would cause “irreversible harm” [5]. The court agreed, noting JSW had time to file a review petition and that liquidation could complicate things. It’s like pressing pause on a high-stakes game to rethink the strategy.
The decision also responded to objections from BPSL’s former promoter, Sanjay Singhal, who pushed for liquidation. JSW argued he acted prematurely and lacked authority [6]. The status quo order ensures fairness until the review petition is resolved, keeping jobs and economic stability in focus.
Conclusion
The BPSL insolvency case is a rollercoaster of corporate drama, legal battles, and real-world stakes. The Supreme Court’s decision to pause liquidation gives JSW Steel a shot at redemption, potentially saving thousands of jobs and stabilizing India’s steel industry. But the review petition is the make-or-break moment if it fails, liquidation could hit hard, affecting creditors, employees, and local economies. For millennials and Gen Z, this case is a wake-up call about how corporate governance and economic policies shape the world. It also exposes gaps in India’s insolvency laws, making it a must-watch for anyone into business news or economic trends. Stay tuned this BPSL saga is far from over.
References:
[1] “Supreme Court halts Bhushan Steel liquidation, orders status quo,” Business Standard, May 26, 2025. [Online]. Available: https://www.business-standard.com/companies/news/supreme-court-halts-bhushan-steel-liquidation-orders-status-quo-125052601154_1.html
[2] “Why SC quashed JSW’s Rs 19,700 cr insolvency resolution plan for Bhushan Power & Steel,” The Print, May 2025. [Online]. Available: https://theprint.in/judiciary/why-sc-quashed-jsws-rs-19700-cr-insolvency-resolution-plan-for-bhushan-power-steel/2614934/
[3] “Bhushan Power saga: Why did Supreme Court reject JSW Steel takeover bid and order liquidation,” The Indian Express, May 2025. [Online]. Available: https://indianexpress.com/article/business/companies/bhushan-power-saga-why-did-supreme-court-reject-jsw-steel-takeover-bid-and-order-liquidation-9982793/
[4] “Bhushan Power: Supreme Court slams JSW for dishonest, fraudulent conduct, says resolution plan violated IBC,” Bar and Bench, May 2025. [Online]. Available: https://www.barandbench.com/news/litigation/bhushan-power-supreme-court-slams-jsw-for-dishonest-fraudulent-conduct-says-resolution-plan-violated-ibc
[5] “JSW moves Supreme Court to halt Bhushan Power and Steel Ltd liquidation,” The Economic Times, May 2025. [Online]. Available: https://economictimes.indiatimes.com/news/india/jsw-moves-supreme-court-to-halt-bhushan-power-and-steel-ltd-liquidation/articleshow/121369260.cms
[6] “Supreme Court puts Bhushan Power liquidation on hold amid JSW review plea,” India Today, May 26, 2025. [Online]. Available: https://www.indiatoday.in/amp/business/story/supreme-court-puts-bhushan-power-liquidation-on-hold-amid-jsw-review-plea-2730641-2025-05-26
