SC clears ₹19,000 Cr JSW Steel takeover of Bhushan Power, overturns May ruling

In a landmark verdict, the Supreme Court on September 26 reinstated JSW Steel’s ₹19,000 crore acquisition of Bhushan Power and Steel Ltd (BPSL), overturning its own May judgment that had quashed the deal and ordered liquidation.

A bench led by Chief Justice B R Gavai, along with Justices S C Sharma and K Vinod Chandran, upheld the National Company Law Appellate Tribunal’s (NCLAT) February 17, 2020 order approving JSW’s resolution plan. The court stressed that the takeover, executed under the Insolvency and Bankruptcy Code (IBC), had not only rescued the debt-laden company but turned it into a profitable enterprise.

“The corporate debtor, once mired in losses, has now become a profit-making entity,” the bench observed. “JSW invested heavily in modernisation and expansion, safeguarding thousands of jobs and reviving operations. If a resolution applicant transforms a company, should it be penalised for success?”

In May, a separate top court bench had struck down the NCLAT order, citing non-compliance with IBC provisions, and directed liquidation of BPSL. That ruling, however, was recalled in July following review petitions, paving the way for Friday’s decision.

Warning against reopening settled resolutions, the court said permitting belated claims outside approved plans would undermine the sanctity of the IBC framework. “It would open a Pandora’s box and frustrate the very objective of the Code,” the bench noted.

The ruling effectively settles the protracted legal battle, cementing JSW Steel’s position as the owner of BPSL — a case the court held up as a demonstration of the IBC’s intent: ensuring viable companies survive as going concerns.