**Supreme Court Orders Liquidation of Bhushan Power and Steel Ltd**
The Supreme Court of India has mandated the liquidation of Bhushan Power and Steel Ltd (BPSL), dismissing the resolution plan proposed by JSW Steel for the financially troubled company. The court deemed the ₹19,700-crore resolution plan submitted by JSW Steel as illegal and inconsistent with the Insolvency and Bankruptcy Code (IBC).
In its ruling, the apex court stated that the Committee of Creditors (CoC) should not have approved the resolution plan and invoked its extraordinary powers under Article 142 of the Constitution to direct the liquidation of BPSL. This decision marks the second instance in recent months, following the case of Jet Airways, where the Supreme Court has exercised its constitutional authority to order the liquidation of a significant insolvent entity.
JSW Steel’s proposal included a payment of ₹19,350 crore to financial creditors, representing nearly a 60% haircut, and ₹350 crore to operational creditors against their acknowledged claims of ₹733 crore. BPSL was identified as one of the 12 major non-performing assets (NPAs) by the Reserve Bank of India in 2017, with debts exceeding ₹47,000 crore to lenders and over ₹780 crore to operational creditors.
The liquidation is expected to have substantial repercussions for major banks, including the State Bank of India and Punjab National Bank, which led the CoC in this case. Compounding BPSL’s challenges was a high-profile investigation by the Enforcement Directorate (ED) into its former promoters, who allegedly misappropriated ₹4,025 crore in bank loans. In October 2019, the ED provisionally attached BPSL’s assets under the Prevention of Money Laundering Act (PMLA), labeling them as proceeds of crime, which significantly delayed the acquisition process.
In December 2024, the Supreme Court ordered the ED to release assets worth over ₹4,000 crore that had been seized during its investigation. However, the ED continued to assert that JSW Steel was a related party due to its minority stake in a separate joint venture with BPSL.
This ruling concludes one of India’s most prolonged and closely monitored insolvency cases, resulting in liquidation rather than resolution. Following the announcement, shares of JSW Steel fell by 6.5%, trading at ₹962 on the National Stock Exchange.
**FAQ**
**What does the Supreme Court’s ruling mean for BPSL?**
The Supreme Court’s ruling means that Bhushan Power and Steel Ltd will be liquidated, ending its attempts at resolution and significantly impacting its creditors and stakeholders.