SC Recalls Bhushan Power Liquidation Judgment, Admits JSW's Review Petition

Supreme Court on Thursday recalled one of its earlier judgments over the insolvency resolution plan of JSW Steel for Bhushan Power and Steel Ltd (BPSL). The bench of Chief Justice BR Gavai and Justice Satish Chandra Sharma noted that their earlier judgment "does not correctly consider the legal position as has been laid down by a catena of judgments."

On May 2, the Supreme Court had cancelled JSW Steel’s ₹19,700 crore resolution plan for Bhushan Power & Steel Ltd, citing violations of the Insolvency and Bankruptcy Code (IBC). It ordered BPSL’s liquidation, stating that the Resolution Professional and Committee of Creditors failed in their duties. The court also found that JSW delayed compliance for two years and misrepresented facts before the creditors.

The Court also criticised the NCLT and NCLAT for approving the plan and set aside their orders dated September 5, 2019, and February 17, 2022. Invoking Section 33(1) of the IBC read with Article 142 of the Constitution, the Court directed the initiation of liquidation proceedings against BPSL.

JSW has filed a petition for the review of this judgment, which the apex court accepted on July 31. The bench kept open all the arguments of the parties for fresh hearing on August 7.

"We therefore think that this is a fit case wherein the judgment under review needs to be recalled and the matter needs to be considered afresh. So needless to say that while we are allowing the review, we keep all the questions available to both parties open to be argued at the stage of hearing," CJI BR Gavai said as per Live Law.

CJI said that Justice Satish Chandra Sharma, who was part of the earlier ruling, has agreed that the matter merits reconsideration. “I spoke with my brother judge (J Sharma) yesterday, and he graciously admitted that the issue needs to be revisited,” the CJI noted.

He emphasised the need to consider ground realities, such as JSW’s nearly ₹20,000 crore investment and the livelihoods of 25,000 workers. “We can’t just throw 25,000 people onto the street. Article 142 must be used to do complete justice—not injustice,” he added. The CJI also underscored that judicial interference in the commercial wisdom of the Committee of Creditors should be limited, particularly when the resolution plan has already been approved by both the NCLT and NCLAT.

According to the Live Law report, Solicitor General Tushar Mehta, who appeared for the Committee of Creditors, argued that JSW Steel’s acquisition had revived BPSL from a financial crisis and that minor procedural breaches, like timeline violations, should not warrant liquidation under Article 142. He questioned whether such technical delays, especially when justifiable, should override a plan already implemented.

Senior Advocate Neeraj Kishan Kaul, for JSW, warned the judgment sends “dangerous signals” by discarding a ₹20,000 crore resolution plan approved by the CoC, NCLT, and NCLAT after five years of execution. He also challenged the promoter's legal standing to contest the plan and said the ruling undermines the IBC framework. Kaul urged the court to recall the order, citing serious legal and factual errors.