Former BPSL Promoters Challenge Liquidation in Supreme Court

Quick Summary

• A Special Bench of the Supreme Court, led by Chief Justice B.R. gavai, began reviewing the court’s May 2 verdict rejecting JSW steel’s resolution plan for Bhushan Power and Steel Ltd (BPSL).
• The May 2 judgment had also ordered the liquidation of BPSL to commence.
• Senior advocate Dhruv Mehta, representing former promoters of BPSL, argued against liquidation and requested a new insolvency resolution process if JSW’s plan was flawed.
• Solicitor General tushar Mehta stated that former promoters had no authority to question the resolution plan terms.
• On May 26, the court mandated a status quo on liquidation proceedings initiated at NCLT to allow time for JSW to file a review petition; this delay was sought in “the interest of justice.”
• JSW recently highlighted that BPSL has significant economic contributions: Rs 28,000 crore turnover annually, increased production capacity from 2.5 metric tonnes to 4.5 metric tonnes, and employs about 25,000 people.
• The Supreme Court previously found JSW’s Resolution Plan “in flagrant violation” of IBC laws due to deficiencies in duties by the Resolution Professional during insolvency proceedings for BPSL under CIRP regulations.

Indian Opinion Analysis
The ongoing review underscores critical tensions between legal frameworks governing insolvency resolutions versus broader economic ramifications such as employment stability and industrial productivity in India. While adherence to statutory provisions is vital for maintaining credibility within India’s corporate governance system under IBC guidelines, stakeholders-including courts-are cautious about rushing into liquidations without assessing their socioeconomic consequences thoroughly.

JSW’s arguments highlight significant economic stakes tied directly to Bhushan Power and Steel Ltd., which could ripple through national manufacturing sectors if its operations are disrupted via swift liquidation decisions-a situation impacting not only creditors but also thousands employed directly or indirectly through allied industries.

Importantly,this case illustrates India’s balancing act between ensuring procedural compliance within corporate resolutions while safeguarding long-term institutional growth amid complexities like high-value assets or significant workforce reliance involved therein.

Read more: [Link provided in source]