India’s Supreme Court has recalled its earlier order directing the liquidation of Bhushan Steel and Power Ltd. The decision signals a fresh hearing on the resolution plan originally submitted by JSW Steel, following concerns over procedural and legal missteps during the insolvency process.
In a major reversal, the Supreme Court of India has recalled its earlier order dated May 2 that directed the liquidation of Bhushan Steel and Power Limited (BSPL). The apex court has now decided that the matter requires a fresh hearing due to serious procedural and legal discrepancies identified in its initial assessment of the insolvency resolution process.
Legal Oversight Prompted Reversal
A bench comprising Chief Justice B R Gavai and Justice Satish Chandra Sharma observed that the previous verdict did not accurately reflect established legal precedents under India’s Insolvency and Bankruptcy Code (IBC). The court pointed out that various arguments were either overlooked or inaccurately attributed, leading to concerns that key legal tenets were not adequately upheld.
We are of the view that the impugned judgment does not correctly consider the legal position as has been laid down in a catena of judgments.”
The bench
Given the weight of procedural lapses and factual disputes, the court deemed it necessary to recall the judgment entirely and scheduled a fresh hearing for next Thursday.
Also Read: Supreme Court Opens BPSL Review—JSW’s Fate Hangs in the Balance
Criticism of the Resolution Process
Earlier, the court had cancelled the resolution plan submitted by JSW Steel, calling it unlawful and a breach of the IBC. Strong criticism was also directed at the role played by key stakeholders in the insolvency process — including the Resolution Professional (RP), the Committee of Creditors (CoC), and the National Company Law Tribunal (NCLT) — for facilitating what was described as a “flagrant violation” of insolvency norms.
By criticising the conduct of all involved, the court highlighted a larger issue: the inconsistent application of IBC procedures that risks undermining investor confidence and the broader restructuring framework in India.
Implications for Insolvency Law in India
This reversal is not merely procedural — it raises larger questions about how insolvency resolutions are handled in India, especially in cases involving large distressed assets. Market analysts note that frequent judicial interventions and inconsistent precedents can introduce uncertainty into the insolvency ecosystem, potentially discouraging investor participation in resolution processes.
Legal experts suggest that this development may trigger a closer review of how insolvency professionals and creditors’ committees adhere to regulatory frameworks, particularly in complex multi-stakeholder environments.
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