Supreme Court to Review May 2 Verdict on Bhushan Power & Steel Liquidation Amid Industry Turmoil

The Supreme Court of India is poised to hear review petitions challenging its May 2, 2025 judgment that scrapped JSW Steel's ₹19,700 crore resolution plan for Bhushan Power & Steel Ltd (BPSL), declaring it illegal under the Insolvency and Bankruptcy Code (IBC). The earlier verdict had ordered the liquidation of BPSL, stirring significant concerns across stakeholders, including employees, lenders, and the steel industry at large.

The dispute centers around JSW Steel's acquisition attempt of BPSL, a process spanning over four years. The former promoters of BPSL—Sanjay Singhal and his family—alongside JSW Steel and lenders such as Punjab National Bank and State Bank of India, filed review petitions against the Supreme Court's decision to quash the resolution plan. The petitions argue that JSW's plan revived the bankrupt company, boosting its capacity and contribution to the exchequer substantially.

On July 31, the Supreme Court indicated plans to constitute a bench focused on these review petitions, with Chief Justice B.R. Gavai emphasizing an open court hearing. Solicitor General Tushar Mehta, representing the Committee of Creditors, also advocated for this procedural transparency. Meanwhile, the Court has stayed liquidation proceedings pending the review outcomes, temporarily safeguarding jobs and investor interests.

Key issues raised include accusations that the resolution professional and the Committee of Creditors neglected statutory duties and violated the IBC’s objectives by approving JSW’s resolution plan. The apex court's initial May ruling was critical of procedural lapses, including the treatment of stakeholders during the process and the handling of creditor claims.

The ongoing legal saga has triggered anxiety among BPSL's workforce, especially at the steel plant in Odisha’s Jharsuguda district, where employees fear job losses. Demonstrations and appeals for government intervention have highlighted the social dimension of the liquidation matter, pointing to its wider economic ramifications.

Meanwhile, JSW Steel has stressed its full compliance with the resolution plan and is evaluating all legal options to protect its investment and business operations linked to BPSL assets.

The Supreme Court’s final ruling on the review petitions will have lasting implications for insolvency resolution norms, creditor rights, and asset acquisition strategies within India's steel sector — a crucial component of the nation's industrial landscape.