The Supreme Court of India has reversed its earlier decision and upheld JSW Steel’s resolution plan for Bhushan Power and Steel (BPSL), restoring the company’s rights and securing its hold on the acquisition. The initial ruling on May 2 had quashed the five-year-old plan, directing liquidation and putting at risk over ₹34,000 crore in bank debt and ₹19,350 crore already paid by JSW Steel. The new ruling has relieved lenders and investors who feared the precedent could unravel other long-settled deals.
The case unfolded when a bench of justices struck down JSW Steel’s resolution plan, citing procedural lapses and violations of the Insolvency and Bankruptcy Code (IBC). However, after a review was sought and a new bench re-heard the case, the court approved JSW’s plan, concluding that interfering with the commercial wisdom of the Committee of Creditors (CoC) would undermine the spirit of the IBC.
A key factor in the reversal was the court’s view on the time-bound framework of the IBC. While the initial ruling faulted JSW for delays in payments, the new bench acknowledged that these delays were triggered by factors beyond the company’s control, such as steel price volatility and Enforcement Directorate attachment orders. The court held that the focus should be on the intent and bona fides of bidders rather than rigid adherence to timelines.
The ruling also reaffirmed the sanctity of the CoC’s commercial judgment, stating that courts must avoid second-guessing creditor decisions unless there is clear mala fide intent. The September bench noted that the CoC had monitored progress, approved extensions after deliberation, and acted in good faith under difficult circumstances.
The Supreme Court also ruled on the contentious issue of ₹6,155 crore in Ebitda generated by BPSL during its insolvency process, stating that it rightfully belongs to JSW Steel. The court stressed that once a resolution plan reaches finality, its terms cannot be reopened or renegotiated.
The verdict is a major reprieve for JSW Steel, which had acquired BPSL in 2021. The company can now move ahead with integrating BPSL’s assets, scaling expansion projects, and unlocking synergies across eastern India. The ruling is also seen as a strong endorsement of JSW’s IBC-led acquisition strategy, which is likely to boost investor confidence.
The implications of the ruling are significant for India’s insolvency framework. The verdict reaffirms the sanctity and finality of approved resolution plans, underscoring that insolvency is meant to resolve stress, not perpetuate litigation. The ruling draws sharper boundaries between insolvency law and other regulatory interventions, ensuring that once a plan is approved by the CoC and NCLT, its implementation cannot be derailed except in the rarest of cases.