In a significant development in the Bhushan Power and Steel Ltd (BPSL) insolvency case, the Supreme Court on Monday ordered a status quo on the ongoing liquidation proceedings before the National Company Law Tribunal (NCLT). This interim order grants temporary relief to JSW Steel, which is seeking to file a review petition challenging the earlier court ruling that paved the way for liquidation.
JSW Steel’s senior counsel informed the apex court that the company intends to exercise its statutory right to file a review petition and that the time limit to do so has not yet expired. Formal steps to submit the review petition are reportedly already underway. JSW argued that if liquidation proceeds before the court considers its review plea, it would irreparably harm its legal rights and make the review ineffective.
Meanwhile, the former promoter of BSPL—named Respondent No. 1 in the case—is pushing for swift execution of the Supreme Court’s previous order, which would accelerate the liquidation process. Recognizing the competing interests, the Supreme Court chose a middle path, emphasizing the need for a practical solution to ensure justice without prejudging the merits. It held that maintaining the current status quo on liquidation proceedings until the review petition is filed and adjudicated is in the interest of justice.
This order effectively halts the liquidation process, providing JSW Steel crucial breathing space to protect its investment and pursue legal recourse. The eventual outcome of the review petition will be pivotal in determining the fate of one of India’s largest and most complex debt resolution cases under the Insolvency and Bankruptcy Code (IBC).
BSPL, once a major steel producer in India, entered insolvency proceedings amid heavy debt burdens. JSW Steel had emerged as the frontrunner in acquiring BSPL’s assets, making this legal tussle highly significant for the corporate insolvency framework and asset resolution landscape in India. The case is being closely watched for its potential to shape future insolvency proceedings involving large industrial conglomerates.
