SC halts BPSL liquidation as JSW Steel plans to seek review

The Supreme Court on Monday paused liquidation proceedings of Bhushan Power and Steel Ltd (BPSL), granting temporary relief to JSW Steel, which plans to challenge the apex court’s recent order rejecting its ₹19,300 crore resolution plan for the company.

A bench of Justices B.V. Nagarathna and Satish Chandra Sharma directed that a status quo be maintained on the matter before the National Company Law Tribunal (NCLT), allowing JSW Steel time to file a review petition within the statutory limitation period.

The apex court’s earlier ruling on May 2, 2025, had overturned JSW Steel’s approved resolution plan on grounds of non-compliance with key provisions of the Insolvency and Bankruptcy Code (IBC), including failure to follow the sanctioned timeline. With the window to seek a review of that judgment still open, the Court observed that halting the liquidation was necessary to avoid further legal and commercial complications.

“Without expressing any opinion at this stage, we are of the view that it would be in the interest of justice if status quo is maintained,” the bench said. It also recorded the assurance from JSW’s counsel that a review petition would be filed on time and in accordance with the law.

Representing JSW, senior advocate Neeraj Kishan Kaul raised concerns over the NCLT’s move to appoint a liquidator even before the review period had lapsed. “It’s a profit-making company. The resolution plan was submitted four years ago. If liquidation proceeds now, it will be extremely damaging,” Kaul argued.

Solicitor General Tushar Mehta, appearing for the Committee of Creditors (CoC), did not oppose the relief sought. He proposed deferring the NCLT proceedings until June 10 to protect all stakeholders’ interests. “NCLT will have to hear the matter. The only question is the timing,” he submitted.

When the bench pointed out that review petitions are generally not heard during the court’s summer break, Mehta remarked that the CoC may have to return funds in such a scenario.

On the other side, senior advocate Dhruv Mehta, representing former BPSL promoter Sanjay Singhal, questioned the maintainability of JSW’s appeal against the NCLT proceedings.

JSW Steel had approached the Supreme Court seeking a stay on liquidation, contending that the move would harm the interests of the company, lenders, and employees. JSW acquired BPSL in a bankruptcy resolution process approved by the NCLT in 2019. The transaction was concluded in 2021. The Supreme Court’s May 2 judgment, however, disrupted the deal by ordering liquidation and directing the refund of payments made by JSW.

The case will now hinge on the review petition, which JSW is expected to file shortly.

Also See: A relook at Bhushan Power and Steel Limited insolvency process