Revival, Not Liquidation — How the Supreme Court Saved Bhushan Steel
When procedure threatened to kill a company. and the Court stepped in.
Sometimes a judgment arrives that shocks everyone.
That is exactly what happened on 2 May 2025.
A Little Background....
Bhushan Power and Steel was once one of India's largest steel companies. Then came the debt. In 2017, Punjab National Bank filed for insolvency, triggering the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC).
JSW stepped in. A ₹19,700 crore resolution plan was approved. Over 25,000 employees kept their jobs. Creditors saw a path to recovery. It felt like IBC was working exactly as it was meant to.
That hope was built in 2021.
Then Came May 2025...
A two-judge bench struck down JSW's resolution plan and ordered the liquidation of Bhushan Power and Steel under Section 33(1) of the IBC.
The Court found that the plan violated Section 30(2) and Regulation 38 meaning operational creditors were not treated equitably. JSW's eligibility under Section 29A had not been independently verified. And the statutory 330-day CIRP timeline under Section 12 had long been crossed.
On paper, the violations were real. On the ground, 25,000 livelihoods were at stake.
What the Larger Bench Saw...
On 31 July 2025, the matter was reopened. The Court found that the earlier judgment had overlooked significant legal precedents and key arguments never properly considered.
JSW and the Committee of Creditors argued together the delays were not their fault. The Enforcement Directorate had attached BPSL's assets under PMLA (Prevention of Money Laundering Act, 2002), regulatory hurdles mounted, and the former promoters obstructed at every step.
JSW should not be penalised for factors entirely outside its control. The Court agreed. The liquidation order was recalled.
The Bigger Point...
The Court did not just save one company. It reaffirmed a principle.
The IBC is not a mechanical checklist. Sections 30 and 31 demand procedural compliance but the law's deeper purpose is revival, not destruction. Liquidation is a last resort. Not a first response.
When a path to revival exists take it.
This is the kind of judgment that does not just resolve a dispute. It tells courts, creditors, and companies what the law actually stands for.
About Nyaya Grah Legal Team — CA/CS/Advocates
A team of qualified Chartered Accountants, Company Secretaries, and Advocates providing trusted legal and business services across India since 2024.
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