SC to Rehear JSW-Bhushan Steel Case, Withdraws May 2 Liquidation Order

Speedy Summary

• A Special Bench of the Supreme Court, headed by Chief Justice of India B.R. Gavai, recalled its May 2 verdict rejecting JSW Steel’s resolution plan for Bhushan Power adn Steel Ltd.(BPSL).
• The May judgment had ordered liquidation proceedings to commence for BPSL under the Insolvency and Bankruptcy Code (IBC), citing violations in JSW’s resolution Plan and failures by the Committee of Creditors (CoC) and Resolution Professional.
• on Thursday, the court expressed doubts about whether the May decision appropriately assessed legal precedents in similar cases.
• The review petitions have been listed for detailed hearing on August 7.
• Earlier in May,status quo on liquidation was ordered to prevent complications while allowing JSW time to file a review petition.
• JSW presented arguments emphasizing BPSL’s ₹28,000 crore annual turnover, increased production capacity from 2.5 MT to 4.5 MT, and employment of 25,000 workers as reasons against rushing into liquidation.

Indian Opinion Analysis

The Supreme Court’s decision to reconsider its earlier ruling is significant as it underscores potential gaps in evaluating legal nuances during complex insolvency disputes involving high-value companies. By recalling its judgment and opting for a fresh hearing on August 7th, it reflects judicial prudence when dealing with a case that has substantial economic implications-considering factors such as employment levels at BPSL or its notable turnover.

While questions about procedural compliance during corporate insolvency resolution persist-as highlighted in the May verdict-the reconsideration allows stakeholders including creditors to reassess their positions without jeopardizing ongoing operations immediately under liquidation processes. This progress also highlights broader implications related to India’s framework for resolving financial distress among major corporations under IBC laws-a cornerstone of economic recovery strategies targeting systemic financial stability.

Read more: The Hindu