SC Halts Bhushan Power Liquidation, Permits Sajjan Jindal-led JSW Steel's Review Plea

Supreme Court halted liquidation proceedings of Bhushan Power and Steel Ltd (BPSL) on May 26. The apex court bench comprising Justices B.V Nagarathna and Satish Chandra Sharma has allowed JSW Steel to file a review petition within 30 days against its previous order that had quashed the Sajjan Jindal-led giant’s Rs 19,300 crore resolution plan, the Mint reported.

After SC’s move, it is likely that the National Company Law Tribunal (NCLT) will postpone its hearing on BPSL’s liquidation until JSW Steel’s review petition is decided. 

“Without expressing any opinion at this juncture, we find that the interest of justice will be served if the status quo is maintained in the proceedings pending before the NCLT. We clarify that this order of status quo will operate until the consideration of the review petition,” said Justice Nagarathna, according to the Mint.

Also Read: JSW Steel May Lose BPSL Tax Gains as Supreme Court Scraps Deal

The top court’s decision came as a response to a plea filed by JSW Steel, wherein it sought a stay on the liquidation process started by BPSL’s former promoter Sanjay Singhal and had asked for 60 days' time to file a review petition. 

Prior to this, the former promoter had approached the NCLT and had requested immediate commencement of liquidation proceedings following the top court’s May 2 judgment that had cancelled JSW Steel’s resolution plan.  

The May judgement was a major blow to JSW Steel, which had acquired BPSL via the corporate insolvency resolution process more than five years back and since then has pumped significant funds into the company.  

JSW Steel’s joint MD Jayant Acharya in a post-earnings call last week highlighted that the resolution plan implemented by the company is in compliance with the law. 

“[JSW Steel] implemented the resolution plan of BPSL in compliance with the law and taken steps to successfully revive the company to its present state today,” Acharya had said. 

Hence, the recent order by the top court that has allowed JSW Steel to file a review petition is important for the company from both a legal and financial front.