The Supreme Court has directed a status quo on the liquidation proceedings of Bhushan Steel and Power Ltd (BPSL) at the National Company Law Tribunal (NCLT), following a petition filed by JSW Steel. This comes after the Supreme Court rejected JSW's ₹19,700 crore resolution plan for BPSL on May 2.
A bench of Justice BV Nagarathna and Justice Satish Sharma issued the order, considering that the deadline for JSW to file a review petition against the Supreme Court’s earlier decision has not yet expired.
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The Court noted:
“Liquidation of the company might jeopardize the review petition to be filed by JSW. Status quo is ordered in the interest of justice.”
Senior Advocate Neeraj Kishan Kaul, representing JSW, argued that despite the review period not ending until June 2, the NCLT was already moving forward to appoint a liquidator. He emphasized that this could cause significant issues for JSW, stating:
“If a liquidator is appointed, we will be in great difficulty. It is a profit-making company, and the resolution plan was submitted four years ago.”
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However, the bench acknowledged that NCLT’s actions were in line with the Supreme Court’s previous directions. Solicitor General Tushar Mehta, representing the Committee of Creditors (CoC), proposed deferring the matter to June 10 to accommodate all parties. He said:
“I am not opposing. NCLT will have to hear the matter. Kindly ask them to take up this matter on 10th June. Everybody's interests will be taken care of.”
Justice Nagarathna noted the challenge of listing review petitions during vacation. SG Mehta explained the complexity of the financial situation, mentioning:
“We will have to return the money. This was a resolution plan implemented five years ago. They have taken money from other banks, including foreign banks. It will be difficult to deal with them. A solution must be found.”
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Kaul also pointed out that Sanjay Singhal, the ex-promoter of BPSL, lacked standing in the case and was under investigation by the Enforcement Directorate for malpractices. On the other hand, Senior Advocate Dhruv Mehta, representing Singhal, argued that JSW’s plea was not maintainable, as they had not exhausted their appeal options.
The Court ultimately disposed of JSW’s petition, ordering the status quo but clarifying that it had not expressed any views on the case’s merits. The Court stated:
“The relief is granted solely in the interest of justice and to avoid complexity. JSW undertakes to file the review petition within the limitation period.”
It is important to recall that on May 2, the Supreme Court had rejected JSW’s resolution plan, holding it in violation of Sections 30(2) and 31(2) of the Insolvency and Bankruptcy Code (IBC). The bench, comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma, observed that the CoC should not have accepted JSW’s plan and criticized the NCLT for approving it.
As a result, the Supreme Court ordered BPSL’s liquidation under Section 33 of the IBC. Meanwhile, Sanjay Singhal has filed a petition with NCLT Delhi, requesting enforcement of the Supreme Court’s order to liquidate BPSL per the IBC.
Case Details: JSW STEEL LIMITED v SANJAY SINGHAL AND ORS|Diary No. 29406-2025
