The Supreme Court on 26 September overturned its own earlier ruling and approved JSW Steel’s Rs 197 billion resolution plan for Bhushan Power & Steel Ltd (BPSL), dismissing objections raised by the company’s former promoters and certain creditors.

A bench led by Chief Justice of India BR Gavai re-heard the case after recalling its May judgment that had rejected the plan. The court also dismissed pleas by Bhushan Power’s lenders seeking a share in the company’s EBITDA and claims of Rs 35.7 billion in earnings and Rs 25 billion in delay-related interest.

The bench, also comprising Justices Satish Chandra Sharma and K Vinod Chandran, ruled that a successful resolution applicant (SRA) cannot be forced to honour claims outside the request for resolution plan (RfRP) under Section 25 of the Insolvency and Bankruptcy Code (IBC).

The court observed that JSW Steel had revived BPSL through heavy investment in modernisation and by preserving thousands of jobs, achieving the IBC’s purpose of transforming a loss-making entity into a profitable one.

On 2 May, a bench led by Justice Bela M Trivedi had ordered liquidation of BPSL while rejecting JSW Steel’s plan. However, on 31 July, the CJI-led bench recalled that verdict, criticising the conduct of the committee of creditors, the resolution professional and the National Company Law Tribunal (NCLT) for what it termed serious breaches of the IBC process.

The resolution had faced significant delays, with payments to financial creditors overdue by 540 days and to operational creditors by over 900 days. Insolvency proceedings against BPSL began in 2017 on a petition by Punjab National Bank, with JSW Steel’s plan first approved by the NCLT in 2019.

At 11 am on 26 September, JSW Steel’s shares traded 0.4 per cent higher at Rs 1,154 apiece.