JSW Steel Hails SC Verdict on Bhushan Power and Steel

JSW Steel on Friday welcomed the Supreme Court’s decision of upholding its resolution plan for Bhushan Power and Steel, saying the verdict has reinforced the integrity and sanctity of the Insolvency and Bankruptcy Code (IBC) Earlier, in the day, the Supreme Court upheld JSW Steel’s ₹19,700 crore resolution plan for debt-ridden Bhushan Power and Steel Limited (BPSL), bringing down curtains to a prolonged legal battle that spanned nearly eight years.

A bench comprising Chief Justice B R Gavai and Justices Satish Chandra Sharma and K Vinod Chandran upheld the February 17, 2020, verdict of the National Company Law Appellate Tribunal (NCLAT).

The NCLAT had allowed JSW Steel to acquire BPSL for ₹19,700 crore by providing it immunity from prosecution by the Enforcement Directorate.

In a filing to the exchanges, JSW Steel said, "Supreme Court has delivered a landmark judgement concerning one of the largest corporate resolutions in the history of the Insolvency and Bankruptcy Code, 2016 (IBC Code) and has preserved the integrity and sanctity of the IBC Code by upholding the finality of implemented resolution plans by successful resolution applicants." JSW Steel said the court has today delivered its judgment in the appeals filed by the erstwhile promoters and certain operational creditors of Bhushan Power and Steel Ltd. (BPSL).

The court has dismissed the appeals filed by the erstwhile promoters and certain operational creditors and upheld the judgment of the National Company Law Appellate Tribunal dated February 17, 2020.

The SC also noted the substantial efforts of the Company in resolving and turning around BPSL as a profit-making company.

"We do not find any merit in the appeals. The appeals are therefore dismissed. The impugned judgment dated 17th February 2020, passed by the NCLAT, is upheld,” said CJI Gavai, who authored the 136-page judgment for the bench, held and dismissed challenges to the plan.

The court reserved its verdict on August 11 on appeals filed by the former promoters and operational creditors of Bhushan Power and Steel Limited (BPSL) challenging the JSW Steel resolution plan.

BPSL was among the 12 large corporate defaulters, often referred to as the RBI’s “dirty dozen”, as identified in June 2017 for insolvency resolution.

With admitted claims of over ₹47,000 crore from financial creditors and more than ₹600 crore from operational creditors, the case soon became one of the largest insolvency proceedings in the country.

JSW Steel emerged as the highest evaluated bidder in October 2018 and subsequently secured approval from the CoC.

However, the resolution process became mired in litigation after investigative agencies, including the CBI and ED, initiated proceedings against BPSL and its promoters on allegations of fraud and money laundering.

In September 2019, the NCLT approved JSW’s plan subject to conditions, which were later modified by the NCLAT in February 2020.

A few appeals were filed and led to the filing of pleas in the top court.

The SRA was represented by Karanjawala and co team comprising Nandini Gore and Tahira Karanjawala in the proceedings.