The Supreme Court’s Bold Verdict Over JSW Steel-BPSL Deal
In a major development that could reshape India’s insolvency landscape, the Supreme Court has declared JSW Steel’s acquisition of Bhushan Power and Steel Ltd (BPSL) illegal. This decision, delivered on May 2, 2025, sent shockwaves across corporate India. The top court found flagrant violations of the Insolvency and Bankruptcy Code (IBC), flagging missed timelines, poor oversight, and regulatory breaches in the resolution process.
Approved in 2019, JSW’s ₹19,700 crore deal faced delays, and creditors went unpaid until 2022 — a clear red flag.
Why Did the Supreme Court Order BPSL’s Liquidation?
IBC Violations and Delayed Implementation Raised Red Flags
The apex court noted procedural lapses by all parties — Committee of Creditors (CoC), Resolution Professional (RP), and even JSW Steel. It held them accountable for failing to honour mandatory IBC provisions. The delay in implementation — from NCLT’s 2019 approval to payment delays till March 2022 — revealed deep-rooted inefficiencies.
The court’s verdict is not merely a setback for JSW but a wake-up call for the entire insolvency ecosystem. It emphasized that once a resolution plan is approved, its strict and timely execution is non-negotiable.
Government Responds: Monitoring Committee Under Scanner
Steps to Protect Creditors and Restore Faith in IBC
The Financial Services Department is reviewing the SC order and is considering tighter mechanisms to monitor approved resolution plans. As per officials, the Insolvency and Bankruptcy Board of India (IBBI) had already mandated the formation of a monitoring committee in February 2025.
These committees, which include members from CoC, RP, and the acquirer, are meant to track implementation from NCLT approval till final takeover. But the BPSL case proves that enforcement still lacks teeth.
What’s Next for India Inc and IBC Cases?
Ensuring Creditor Protection and Business Confidence
This case has triggered a fresh debate on India’s insolvency reform process. With BPSL owing over ₹47,000 crore, and now heading for liquidation, business sentiment may suffer. The government is expected to enhance accountability in the post-approval stage of resolution.
More importantly, this verdict pushes for trustworthy resolution plans with timely compliance, which protect both operational and financial creditors.
Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions.
