SC reserves judgment in Bhushan Power and Steel case

The Supreme Court of India, on August 11, 2025, reserved its judgment in the ongoing legal battle surrounding JSW Steel’s resolution plan for Bhushan Power and Steel Limited (BPSL). The bench, led by the Chief Justice, heard final arguments from all parties involved in a batch of appeals stemming from the Corporate Insolvency Resolution Process (CIRP).

The hearing followed a significant order from the Supreme Court on July 31, 2025, which had allowed review petitions and recalled an earlier directive to send Bhushan Power and Steel Ltd into liquidation. This decision was a setback to the arguments that JSW Steel had been responsible for the alleged delays in implementing the resolution plan.

Key Arguments

A central point of contention was the treatment of earnings before interest, tax, depreciation, and amortization (EBITDA) generated during the CIRP.

 The CoC, represented by Solicitor General Tushar Mehta, argued that approximately Rs 3,569 crore in EBITDA and Rs 2,500 crore in delay interest should accrue to the financial creditors. The CoC contended that its commercial wisdom is non-justiciable and that it remains in existence until the final judgment.

Senior Counsel Neeraj Kishan Kaul, on behalf of JSW Steel, countered that the company was not responsible for the two-year delay, which he attributed to the Enforcement Directorate’s provisional attachment of BPSL’s assets. He argued that the resolution plan’s Request for Resolution Plan (RFRP) was silent on the matter, precluding any claims from the CoC. He also highlighted the CoC’s change in stance on the EBITDA issue, which it had previously stated should remain with the corporate debtor.

Senior Counsel Dhruv Mehta, representing the ex-promoters, argued they had the right to object to the plan as stakeholders and guarantors. He contended that the CoC becomes functus officio (ceases to have authority) once a resolution plan is approved by the National Company Law Tribunal (NCLT) and that any continuation of CoC powers post-approval would be contrary to established law.

Background

JSW Steel Ltd. had filed a review petition in the Supreme Court challenging the apex court’s 2 May 2025 Judgement, wherein it quashed JSW’s resolution plan for debt-laden Bhushan Power and Steel Ltd. (BPSL), citing gross violations of the Insolvency and Bankruptcy Code (IBC), 2016. The court had ordered the immediate liquidation of BPSL, marking a significant setback for JSW Steel and raising questions about corporate governance in insolvency proceedings. However, on 26^th May, the court had paused liquidation proceedings of Bhushan Power and Steel Ltd, granting temporary relief to JSW Steel.

Also Read: JSW Steel challenges Supreme Court ruling on Bhushan Power, files review petition