In a significant judgment, the Supreme Court on Friday upheld JSW Steel’s ₹19,700-crore resolution plan for debt-ridden Bhushan Power & Steel Ltd, putting to rest years of uncertainty over one of the most high-profile insolvency cases under the Insolvency & Bankruptcy Code.
A 3-judge bench led by Chief Justice B R Gavai, and comprising Justices S C Sharma and K Vinod Chandran, dismissed objections raised by former promoters and certain creditors of BPSL.
“We do not find any merit in the appeals. They are, therefore, dismissed,” the bench observed, while also rejecting lenders’ demand for a share in the company’s EBITDA (earnings before interest, tax, depreciation and amortisation).
This ruling comes as a major relief for JSW Steel, which had already completed the acquisition of BPSL in 2021.
The dispute dates back to 2017, when Punjab National Bank initiated insolvency proceedings against BPSL after the company defaulted on massive bank loans.
In 2019, JSW Steel submitted a ₹19,700-crore resolution plan, which was approved by both the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT). By March 2021, JSW Steel had formally taken control of BPSL’s operations.
However, on May 2, 2025, a two-judge SC bench (Justice Bela M Trivedi and Justice Satish Chandra Sharma) declared the resolution plan a “flagrant violation” of the IBC, holding the Resolution Professional, CoC, and the NCLT responsible. The ruling effectively cancelled JSW Steel’s acquisition, sparking alarm across industry and investor circles.
Just weeks later, on May 26, 2025, another SC bench led by Justice B V Nagarathna stayed liquidation proceedings and ordered status quo, offering temporary respite to JSW Steel while the matter remained under review.
After hearing a batch of petitions in August, the special bench headed by CJI Gavai delivered its final verdict on September 26, upholding JSW Steel’s resolution plan. The ruling effectively overturns the May 2 order, restoring confidence in the IBC framework.
The bench’s rejection of ex-promoters’ and creditors’ objections marks closure on a case that has dragged on for years despite JSW Steel already operating BPSL.
Case Insights
The JSW Steel–BPSL case has emerged as one of the most significant tests of India’s Insolvency and Bankruptcy Code. The earlier cancellation of a fully implemented resolution plan had raised concerns about the certainty and enforceability of IBC-approved deals.
Industry leaders feared that such reversals could discourage investors and bidders from participating in distressed asset sales, undermining the IBC’s very purpose of reviving failing companies.
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