BPSL acquisition: JSW Steel gets another chance as SC agrees to hear the case again

At last, JSW Steel has secured a fresh chance to save its ₹19,350-crore acquisition of Bhushan Power and Steel Ltd (BPSL).

The Supreme Court on Thursday recalled its earlier order that had cancelled the deal and directed BPSL’s liquidation.

The court agreed to review its 2 May verdict and hear the matter afresh, offering JSW one final legal opportunity to retain control of the bankrupt steel company.

A special bench comprising Chief Justice B.R. Gavai and Justice Satish Chandra Sharma said the earlier ruling may have been based on legal errors and that this is a fit case for review.

“Prima facie, we are of the view that the impugned judgment does not correctly consider the legal position as laid down by a catena of judgments. This is a fit case for review,” the bench said, adding that all legal questions would remain open for fresh arguments.

Notably, Justice Sharma, who was part of the earlier two-judge bench that delivered the 2 May ruling, has also agreed to reconsider the matter. “Yesterday, I had a discussion with my learned brother (Justice Sharma), who was gracious enough to admit that it requires reconsideration,” said CJI Gavai.

The Chief Justice further noted that the commercial wisdom of the committee of creditors (CoC) must be respected, especially when it has been upheld by both the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). As per settled law, such decisions should not be interfered with lightly.

The court will now hear all petitions afresh, including those filed by dissenting financial creditors such as Kalyani Group’s Torsteel, the State of Odisha, and former BPSL promoter Sanjay Singal, who had challenged the resolution plan, citing delays in its implementation.

The court will hear the matter next Thursday.

The Supreme Court’s observations have revived JSW Steel’s efforts to retain BPSL. The May ruling not only cancelled the acquisition but also directed banks to return ₹19,350 crore paid by JSW, putting nearly ₹34,000 crore of total bank exposure at risk.

In its plea, JSW Steel highlighted that it had significantly improved BPSL’s operations since acquiring it in March 2021. The company stated that BPSL’s production capacity had nearly doubled from 2.3 million tonnes per annum (mtpa) in 2017 to 4.5 mtpa in 2025. Revenue had grown from ₹8,701 crore in F2016-17 to ₹25,973 crore in 2024-25, while exports averaged ₹2,976 crore annually over the last four years.

Legal experts also welcomed the court’s decision to entertain the review petition, calling it a positive sign not just for JSW but for the broader Insolvency and Bankruptcy Code (IBC) framework.

“The reasons for accepting the review are certainly a positive hope for JSW. If a favourable outcome follows, it could set a precedent for future cases where tribunals may look beyond technicalities and focus on the IBC’s main objective—reviving a company,” said Shiv Sapra, partner at Kochhar & Co.

During the hearing, solicitor general Tushar Mehta, appearing for the Centre, supported JSW’s review plea. He argued that while BPSL had fallen into financial crisis due to defaults, it had been turned around post-acquisition.

Mehta questioned whether a minor delay in submitting the resolution plan justified such a drastic consequence. “Is it such a serious violation that it justifies cancelling a resolution plan approved by the CoC?” he asked, highlighting that the company currently employs around 25,000 people and is now financially healthy.

Senior advocate Neeraj Kishan Kaul, representing JSW Steel, warned that the May verdict had dangerous implications for the IBC.

Kaul questioned how a former promoter, responsible for BPSL’s financial collapse, could be allowed to challenge a resolution plan approved by all key authorities.

“This sends a dangerous signal. A valid plan worth ₹20,000 crore has been set aside after five years,” Kaul said, calling the ruling both factually and legally flawed.

He added that important statutory provisions had been ignored and incorrect facts had been taken into account, many of which were not even argued or pleaded.

Kaul noted that JSW had invested nearly ₹30,000 crore into BPSL and the resolution plan had already been implemented.

He said the order had created uncertainty in the IBC process and could have a devastating effect on future resolution plans. “This is a fit case for your lordships to recall the order and hear the matter afresh. Every ground required for review is satisfied in this matter,” Kaul submitted.

The 2 May ruling was based on petitions filed by dissenting financial creditors, including Kalyani Group’s Torsteel and former promoter Sanjay Singal. They had challenged the resolution plan, citing delays in its implementation.

The court held that the acquisition violated key IBC provisions, particularly strict adherence to prescribed timelines, and ordered BPSL’s liquidation under Article 142 of the Constitution.

BPSL was one of the 12 large corporate defaulters flagged by the Reserve Bank of India in 2017 for resolution under the IBC. At that time, it owed over ₹47,000 crore to its lenders.