SC rejects JSW's resolution plan for Bhushan Steel as illegal, orders liquidation

New Delhi: The Supreme Court on Friday ordered the liquidation of Bhushan Power and Steel Ltd (BPSL), rejecting JSW Steel's resolution plan for the bankrupt company. The apex court held that the ₹19,700-crore resolution plan submitted by JSW Steel was illegal and contrary to the provisions of the Insolvency and Bankruptcy Code (IBC). The court said the resolution plan should not have been approved by the Committee of Creditors (CoC) and invoked its extraordinary powers under Article 142 of the Constitution to direct BPSL’s liquidation. This marks the second time in recent months—after Jet Airways—that the Supreme Court has ordered the liquidation of a major insolvent company by exercising these constitutional powers.

A detailed order is awaited.

JSW Steel had proposed to pay ₹19,350 crore to financial creditors, amounting to nearly a 60% haircut, and ₹350 crore to operational creditors against their admitted claims of ₹733 crore.