Supreme Court Strikes Down JSW Steel’s Acquisition of Bhushan Power; Orders Liquidation
New Delhi, May 2, 2025 — In a dramatic turn for one of India’s landmark insolvency cases, the Supreme Court on Thursday declared JSW Steel’s ₹19,700 crore acquisition of Bhushan Power & Steel Ltd. (BPSL) illegal, ordering the liquidation of the debt-ridden steel company.
The apex court ruled that the resolution plan, which had been approved by the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT) in 2020, failed to comply with key provisions of the Insolvency and Bankruptcy Code (IBC). Justices presiding over the matter observed that the process was marred by procedural lapses and a lack of due diligence by both the insolvency professional and creditors.
Resolution Plan ‘Willfully Breached’
The court held JSW Steel accountable for willfully failing to implement the resolution plan even after receiving approvals and taking control of BPSL’s assets. “The conduct of the successful resolution applicant has undermined the very objectives of the IBC,” the court remarked.
The ruling effectively nullifies the deal and directs that BPSL’s assets be put into liquidation—meaning creditors must now await recovery through asset sales rather than an organized resolution.
Blow to Banks and Creditors
BPSL owes over ₹47,000 crore to a consortium of lenders, including Punjab National Bank and State Bank of India. These banks had already written back large portions of the expected recoveries after the JSW deal was completed in 2021.
With the liquidation order, the banking sector faces fresh concerns over provisioning and the timeline for recovering dues. Market analysts fear this could further dampen sentiment around ongoing and future IBC resolutions.
JSW Steel Responds
JSW Steel, whose shares dropped nearly 7% in early trade following the ruling, issued a statement saying it would await the full judgment before determining its next course of action. “We are reviewing the implications of the order and remain committed to compliance with all legal directives,” the company said.
Broader Impact on Insolvency Framework
Legal experts suggest this verdict could have far-reaching implications for the IBC framework, raising questions about the finality of resolution plans and the legal responsibilities of successful bidders.
“This verdict sends a strong message that resolution plans must be implemented in letter and spirit, and any deviation could have severe consequences,” said insolvency lawyer Ananya Mathur.
The full judgment is expected to be released shortly, which will provide detailed guidance for both the corporate sector and financial institutions involved in insolvency matters.
