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

JSW Steel Ltd. has 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.

In an exchange filing on Wednesday, JSW Steel said: “The Review Petition has been filed inter-alia to challenge… the direction permitting continuation of proceedings against the personal guarantors, which is contrary to the intent and purpose of the IBC and undermines the finality of the resolution plan.” 

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

The reasons cited by the supreme count for rejecting JSW Steel’s resolution plan for Bhushan Power and Steel are as follows:

1. Timeline Violations: The resolution professional failed to adhere to the mandatory 270-day CIRP period under Section 12. The NCLT approved JSW’s plan 540 days after initiation, rendering the process “vitiated from inception.”
2. Eligibility Concerns: The court raised doubts about JSW’s compliance with Section 29A (which bars related parties from bidding) due to a suppressed 2008 joint venture with BPSL. The resolution professional’s failure to certify JSW’s eligibility was termed a “fatal flaw.”
3. Creditor Discrimination: The plan violated Regulation 38 by prioritizing financial creditors over operational creditors. The court cited the Essar Steel precedent, stressing equal treatment under Section 30(2)(b).
4. NCLAT’s Overreach: The tribunal unlawfully stayed the Enforcement Directorate’s provisional attachment of BPSL’s assets under PMLA, exceeding its jurisdiction under the IBC.

SC’s 2 May judgment lambasted JSW for delaying implementation by 900 days despite no stay order, calling it a “fraudulent attempt to enrich itself” amid rising steel prices. The court noted JSW infused only ₹100 crore initially, contravening its ₹8,550 crore equity commitment, and accepted ₹19,350 crore belatedly in 2021–22 under a disputed “fait accompli.”

Also See: Bhushan Power resolution plan implementation as per law: JSW Steel