SC Orders Liquidation of Bhushan Power, Rejects JSW Steel Plan as Illegal
Published • 2 May 2025 at 7:26 AM
SC Invokes Article 142, Orders Liquidation of Bhushan Power & Steel
The Supreme Court has ordered the liquidation of Bhushan Power and Steel Ltd (BPSL), rejecting JSW Steel’s ₹19,700-crore resolution plan as illegal and in violation of the Insolvency and Bankruptcy Code (IBC). The court invoked its special powers under Article 142 of the Constitution, stating that the Committee of Creditors (CoC) should not have approved the plan. This decision, similar to the Jet Airways case, marks another high-profile insolvency ending in liquidation. JSW Steel had offered ₹19,350 crore to financial creditors and ₹350 crore to operational creditors, with nearly a 60% haircut. BPSL, one of the RBI's 12 major NPAs identified in 2017, owed over ₹47,000 crore to lenders. The case was delayed by a long-running Enforcement Directorate (ED) probe into alleged ₹4,025 crore bank loan diversion by BPSL’s former promoters. Though the Supreme Court had ordered the release of over ₹4,000 crore worth of provisionally attached assets in December 2024, the ED opposed JSW Steel’s bid, calling it a related party. The court’s verdict brings closure to one of India’s most complex insolvency cases, but ends with liquidation rather than resolution, impacting major banks like SBI and PNB.
SC Orders Bhushan Power Liquidation, JSW Bid Fails
- The Supreme Court has ordered the liquidation of Bhushan Power and Steel Ltd (BPSL).
- JSW Steel’s ₹19,700-crore resolution plan was rejected as illegal under the Insolvency and Bankruptcy Code.
- The court used special powers under Article 142 to overrule the Committee of Creditors' approval.
- The verdict echoes the Jet Airways case, another high-profile insolvency ending in liquidation.
- BPSL owed over ₹47,000 crore and was one of the RBI's 12 major NPAs from 2017.
- JSW Steel's bid included ₹19,350 crore for financial creditors and ₹350 crore for operational creditors.
- A long-standing ED probe and ₹4,025 crore bank loan diversion case delayed resolution.
- The ED labeled JSW Steel a related party and opposed the bid.
- The Supreme Court’s ruling ends one of India’s most complex insolvency cases with liquidation.
- Major lenders like SBI and PNB are directly impacted by this outcome.
