The Supreme Court of India is set to deliver a verdict on Friday regarding the resolution plan of JSW Steel Ltd for bankrupt Bhushan Power and Steel Ltd (BPSL). The plan, worth ₹19,700 crore, has been a subject of one of India’s longest-running insolvency battles. The court’s decision will determine whether JSW Steel retains control of BPSL or if the company is pushed into liquidation, which could have significant implications for the Insolvency and Bankruptcy Code (IBC) framework.
The case has been ongoing since 2017, when BPSL was identified as one of the 12 large defaulters by the Reserve Bank of India, with debts of over ₹47,000 crore. JSW Steel emerged as the highest bidder in 2018, but the implementation of the plan was delayed due to litigation. The plan was cleared by lenders, approved by the National Company Law Tribunal (NCLT) in 2019, and upheld by the National Company Law Appellate Tribunal (NCLAT) in 2020. However, the Supreme Court’s ruling on May 2 quashed the plan, ordering the liquidation of BPSL and putting nearly ₹34,000 crore of bank debt at risk.
The Supreme Court later recalled its ruling on July 31, citing misapplication of IBC principles and factual inaccuracies. This paved the way for a fresh hearing, which was concluded on August 11. The court’s verdict on Friday will be the final word on the matter, and it will decide whether JSW Steel retains BPSL, if the company is sent into liquidation, or if a fresh round of bidding is ordered.
The outcome of the case is significant for the IBC framework, as it will set a precedent for the treatment of bankrupt companies and the rights of bidders. If JSW Steel retains control of BPSL, it will be a major victory for the company, which claims to have nearly doubled the production capacity of BPSL since taking charge in March 2021. On the other hand, if the company is pushed into liquidation, it could lead to significant losses for banks and other creditors.
The case has been closely watched by the industry, and the verdict is expected to have far-reaching implications for the Indian economy. The Supreme Court’s decision will provide clarity on the interpretation of the IBC and the treatment of bankrupt companies, which will help to boost investor confidence and promote economic growth. With the verdict scheduled to be delivered on Friday, all eyes are on the Supreme Court, as the fate of BPSL and the future of the IBC framework hang in the balance.