Exploring the JSW-BPSL Case and Resolution Plan under IBC

1. What is the JSW–BPSL case about?

This case concerns Bhushan Power and Steel Limited (BPSL), a company that went bankrupt. Under the Insolvency and Bankruptcy Code (IBC), JSW Steel offered a ₹19,700 crore resolution plan to revive BPSL. The plan was approved by the Committee of Creditors (CoC), the National Company Law Tribunal (NCLT), and the National Company Law Appellate Tribunal (NCLAT).

2. What is a Resolution Plan under the IBC?

A resolution plan is a proposal submitted by a potential buyer (such as JSW Steel) to take over a financially distressed company. If approved by the CoC and the NCLT, the plan allows the company to be revived instead of being liquidated.

3. Why did the Supreme Court earlier reject JSW’s plan?

On May 2, 2025, the Supreme Court set aside JSW’s resolution plan, citing the following reasons:

• Delays in implementation of the plan by JSW Steel
• Alleged misrepresentation by JSW
• Failure of the CoC and Resolution Professional to follow due procedures
• Breach of IBC provisions, specifically Sections 30(2) and 31(2)

4. What did the earlier order direct?

The Supreme Court had directed that BPSL be liquidated. This decision overturned the approvals already granted by the NCLT and NCLAT, effectively reversing five years of progress made in reviving the company.

5. What is Article 142 and how is it relevant here?

Article 142 of the Constitution empowers the Supreme Court to pass any order necessary to do “complete justice” in a case. In this instance, the Court invoked Article 142 to recall its earlier judgment and halt the liquidation process, taking into account the investments made and the potential impact on workers.

6. Why did the Court recall its earlier judgment?

The Supreme Court found that its previous ruling:

• Did not adhere to established legal precedents
• Contained factual inaccuracies
• Considered arguments that were never raised during hearings
• Overlooked the fact that JSW had already invested around ₹20,000 crore and successfully revived the company

7. What role did the Committee of Creditors (CoC) play in this case?

The CoC had approved JSW’s resolution plan. Under the IBC, the CoC’s commercial decisions carry significant weight, and courts generally avoid interfering unless there is a clear violation of the law.

8. What did the Solicitor General argue during the review?

During the review proceedings, the Solicitor General argued that:

• BPSL had become financially healthy due to JSW’s management
• Minor procedural lapses should not justify liquidation
• The CoC’s commercial decision must be respected
• Scrapping the plan would endanger over 25,000 jobs

9. What happens next in the case?

The Supreme Court will now hear the matter afresh. Until a final verdict is delivered, the liquidation process remains paused, and all parties will have the opportunity to present new arguments.

10. Why is this case important?

This case holds significant importance because it:

• Demonstrates that the Supreme Court can recall its judgments in rare cases
• Reaffirms the primacy of commercial wisdom in insolvency proceedings
• Reflects a humane judicial approach that prioritizes jobs and investments under Article 142