The Supreme Court on Monday order status quo on the liquidation proceedings related to Bhushan Power and Steel Limited (BPSL) pending before the National Company Law Tribunal (NCLT)..A Bench of Justices Nagarathna and Satish Chandra Sharma directed the same in order to allow JSW to file a review petition against the Court's May 2 judgment. "Ld senior counsel for the appellant submitted that they have the right to file a review petition and the limitation has not expired. However, as per the direction issued by the Court, the promoters are seeking an expeditious implement ion of order. Any implementation will only jeopardise the review petition. We have heard the Ld SG and Senior Counsel for R1. Without expressing any opinion at this juncture, we find the interest of justice will be served if status quo of proceedings pending before NCLT. We clarify that this order status quo will operate the consideration of review petition."Review petition shall be filed before limitation expires.".On May 2, Supreme Court rejected JSW Steel's ₹19,700 crore resolution plan for BPSL, declaring it illegal. The Court has also directed BPSL's liquidation.A Bench of Justices Bela Trivedi and Satish Chandra Sharma held that the Committee of Creditors (CoC) erred in approving JSW Steel's plan, which the Court opined was in violation of the Insolvency and Bankruptcy Code (IBC)..JSW Steel had emerged as the successful resolution applicant for BPSL in 2019, after offering to pay over ₹19,000 crore to financial creditors. The plan was approved by the National Company Law Tribunal (NCLT) in September 2019. It was later upheld by the National Company Law Appellate Tribunal (NCLAT) as well, despite legal challenges, including concerns raised by the Enforcement Directorate (ED) regarding the attachment of BPSL’s assets.The matter reached the Supreme Court amid growing concerns that JSW Steel had not implemented the plan for the years since approval. The Court noted that the resolution applicant failed to fulfill essential post-approval obligations, undermining the very objectives of the IBC, which includes time-bound resolution of insolvency and maximisation of asset value..Notably, in December 2024, the ED decided not to pursue its appeal before the Supreme Court against JSW Steel's takeover of Bhushan Power and Steel under the IBC. It also returned attached assets valued at ₹4,025 crore to JSW Steel so that it could take control of Bhushan Power pursuant to the insolvency resolution process under IBC.The restitution was made after the Supreme Court’s order of December 11, 2024, directing ED to hand over the attached properties of Bhushan Power, after the central agency decided not to pursue its case against Bhushan.The ED had previously attached Bhushan Power's assets under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA) because the former promoters of BPSL were accused of defrauding banks and diverting funds for personal gains. The Committee of Creditors (CoC) challenged the ED attachment during the corporate insolvency resolution process (CIRP), claiming it violated IBC protections..The ED, in turn, opposed JSW Steel's resolution plan, arguing that the assets attached under PMLA were tainted. However, the ED later withdrew its challenge citing Section 32A of IBC. Section 32A was inserted in IBC with effect from December 2019 and provides immunity to the corporate debtor and its assets from prosecution or attachment if a resolution plan of a company under insolvency is approved. This meant that the attachment of properties by ED also ceased on the approval of a resolution plan.The ED had earlier argued that this immunity should not apply to the Bhushan Power case, as the asset attachment by the ED preceded the introduction of Section 32A. However, it changed its stance later on, leading to the withdrawal of its earlier plea in the matter..Senior Advocates Neeraj Kishan Kaul and Gopal Jain appeared for JSW Steels with Advocates Nandini Gore, Senior Partner and Tahira Karanjawala, Partner, Swati Bhardwaj, Shreyas Maheshwari, Akarsh Sharma, Manvi Rastogi, Sharanya Ghosh, Shahyan Khan and Mahek Karanjawala from Karanjawala & Co. JSW was also represented by a team from AZB Partners comprising Rajendra Barot, Senior Partner, Vivek Shetty, Suharsh Sinha, Sherna Doongaji, Akilesh Menezes and Dr. Abhimanyu Chopra..Solicitor General Tushar Mehta represented the Committee of Creditors with a team from Cyril Amarchand Mangaldas comprising Raunak Dhillon, (Partner), Aishwarya Gupta, ( Principal Associate), Isha Malik (Principal Associate).Senior Advocate Pinaki Misra appeared for Bhushan Power.Senior Advocate Dhruv Mehta appeared for the ex-promoter.
