Supreme Court Ruling Revokes Bhushan Power & Steel (BPSL) Resolution Plan, Has Subverted JSW Steel's ₹Acquisition of 190 million. Mint Interpretation of recovery options – from Supreme Court review to potential government intervention.
Why did it have a big blow to JSW?
Supreme Court ruling invalidates JSW Steel's ruling ₹BPSL's Rs 197 billion is a major blow to its growth ambitions, especially its goal of achieving a 50 million ton steel capacity by 2030. JSW paid ₹193.5 million to settle BPSL creditors. BPSL's Odisha Jharsuguda plant contributes 13% to the total output of JSW and 10-11% of EBITDA (interest, tax, tax, depreciation and amortization). Losing assets could cut JSW's FY26 EBITDA, analysts say ₹400 billion–45 billion. The ruling affected 2.5mt of flat products, destroying downstream sectors.
Can this issue be leaked to other departments?
As SC abolishes JSW Steel's acquisition, banks must return ₹Under the COC commitment in March 2020, 193.5 million. JSW has paid to solve it ₹BPSL's financial creditors owed 47,204.51 million. Major public lenders such as the National Bank of India, the National Bank of Punjab and the Bank of Kanara, as well as private lenders such as Axis Bank and Karur Vysya Bank were affected. With BPSL now liquidating, lenders’ recovery may be much lower than the solution plan. This will affect revenue, especially under pressure on PSU bank profit margins and may worsen as the RBI expects reduction rate in fiscal 26.
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Is this the end of the line or can I comment on it?
Under Article 137 of the Constitution, JSW Steel and lenders may file a petition for review to the Supreme Court within 30 days. A complete reversal is unlikely, but partial relief (such as JSW's paid funding clear) may be possible, analysts say. Justice Bela Trivedi, a member of the bench, will retire in the first week of June, a new bench.
Does the government have a role here?
The government is reviewing the rule decision. The Secretary of the Department of Financial Services M. Nagaraju said the matter could soon appear before the government and take legal or policy litigation. Experts suggest that the center may issue a decree to uphold the finality of the resolution plan and post-resolution litigation after containment. The Center draws on bankruptcy and bankruptcy regulations amendments to consider statutory protections against applicants such as JSW to avoid uncertainty in future bankruptcy.
What impact will it have on IBC?
Experts warn that the judgment could weaken the IBC by eroding the finality of the resolution plan. Reopening cases on procedural errors could prevent bold decisions from lenders and COCs. The solution professionals may become too cautious to slow things down to avoid risks. The use of Article 142 to reverse the implementation of resolution plans and order liquidation is unprecedented and raises concerns about the over-division of justice that could undermine the balance of India's bankruptcy regime.
