Supreme Court upholds JSW Steel’s ₹19,700 crore Bhushan Power resolution plan.
Bench rules CoC’s commercial wisdom valid; CCDs treated as equity.
Lenders seek ₹6,155 crore in interest and CIRP earnings.
JSW Steel warns extra claims risk rewriting IBC resolution framework.
The Supreme Court on Friday upheld JSW Steel’s Rs 19,700-crore resolution plan for Bhushan Power & Steel (BPSL) and rejected the objections that were raised by the ex-promoters and certain creditors of BPSL.
According to an observation made by the bench led by CJI BR Gavai along with Justices Satish Chandra Sharma and Vinod Chandran, "We have held that the delay is not attributable to CoC or SRA. They have been trying to sort it out and enforce the resolution plan. We have held that CCDs issued by SRA are to be treated as equity. Commercial wisdom cannot be interfered with... Once the resolution plan to be approved by committee of creditors (CoC), permitting any claims to be reopened will amount to committing violence on provisions of law."
The court also noted that JSW’s significant investment in turning BPSL into a profitable company should not be penalized, Bar and Bench reported.
What Earlier Rulings From this Year Said
The recent backdrop of the case goes back to the May 2025 ruling of the Supreme Court, which had struck down JSW Steel’s takeover plan and ordered BPSL’s liquidation under Article 142 of the Constitution. Delivered by Justices Bela M Trivedi and Satish Chandra Sharma, the judgement held that the CoC had erred in approving the plan.
On August 11, a special Bench heard the matter afresh and revisited the court’s earlier May 2 ruling, which had set aside JSW Steel’s ₹19,700 crore takeover plan of BPSL citing alleged violations of the Insolvency and Bankruptcy Code (IBC). The earlier decision had asked banks to return ₹19,350 crore paid by JSW Steel and put around ₹34,000 crore of bank exposure at risk.
What Lenders Said
According to the lenders, led by Punjab National Bank, their support for JSW Steel’s plan was based on certain conditions, which included an understanding that the company would share part of the business proceeds. The lenders are seeking over ₹6,155 crore, including ₹3,569 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA) during the corporate insolvency resolution process (CIRP) from July 2017 to March 2021, ₹2,509.88 crore as interest for delayed payments to financial creditors, and ₹76.62 crore as interest to operational creditors.
The lenders are being represented by Solicitor General Tushar Mehta, who said, “Interest and Ebitda — these two things must come. There should be fairness for creditors because we are banks. We deal with public money.”
What JSW Steel Said
As per JSW Steel, its resolution plan did not require sharing Ebitda and such earnings cannot be distributed unless expressly allowed in the plan or under law. Senior advocate Neeraj Kishan Kaul, who is representing JSW Steel at the court said, “Even after the resolution professional (RP) started running the company by 2021, it was still a net loss… I am taking over a loss-making company.” The company further warned that accepting the creditors’ claim of over ₹6,000 crore could rewrite settled terms and set a dangerous precedent.
Additionally, former BPSL promoter Sanjay Singal and other dissenting creditors argued that if JSW Steel’s plan is scrapped and that fresh bids should be invited rather than moving to liquidation. They have also claimed that JSW Steel deviated from commitments, infusing only ₹100 crore instead of ₹8,000 crore promised, paying just ₹540 crore upfront to financial creditors, and delaying payments to operational creditors by over 900 days, as per a Business Standard report.
How this Case Started
Back in July 2017, BPSL’s insolvency process began after banks, led by Punjab National Bank, filed petitions over unpaid dues exceeding ₹47,000 crore. During this time, JSW Steel emerged as the successful bidder, outbidding Tata Steel and its plan was approved by creditors, the National Company Law Tribunal (NCLT), and the appellate tribunal. However, the implementation faced several delays due to legal challenges and Enforcement Directorate attachments. Since taking over, JSW Steel says it has nearly doubled BPSL’s production capacity from 2.3 million tonnes per annum in 2017 to 4.5 mtpa in 2025.
