Supreme Court STUNS: Liquidation Order REVERSED! JSW Steel Plan Back ON for Bhushan Power!

In a significant course correction, the Supreme Court of India has reversed its earlier judgment that had ordered the liquidation of Bhushan Power and Steel Limited. The new ruling, delivered by a bench led by Chief Justice BR Gavai, reinstates the resolution plan approved by JSW Steel. This decision effectively sets aside a May 2025 verdict by a different bench which had directed liquidation despite the Committee of Creditors' (CoC) approval and substantial implementation by JSW Steel.

The Court emphasized that the commercial wisdom of the CoC is paramount and cannot be substituted by judicial bodies unless there's clear statutory non-compliance. It clarified that the CoC's role extends beyond approval to monitoring implementation, and that delays, particularly those caused by external factors like regulatory attachments or pending appeals, should not invalidate an otherwise compliant resolution plan. This judgment reinforces the core tenets of the Insolvency and Bankruptcy Code, 2016 (IBC), aiming to prevent procedural technicalities from derailing successful corporate restructuring efforts.

Impact: This ruling is critical for reinforcing investor confidence in India's insolvency framework. By upholding the primacy of commercial decisions and the finality of resolution plans, it promotes business continuity and predictability, which are essential for attracting investment and facilitating economic growth. The judgment steers the IBC away from procedural absolutism towards commercial realism.

Impact Rating: 8/10

Difficult Terms: * **Insolvency Jurisprudence**: The body of law and legal precedents governing situations where individuals or companies cannot pay their debts. * **Liquidation**: The process of winding up a company, selling its assets to pay off creditors, and distributing any remaining funds. * **Resolution Plan**: A proposal outlining how a distressed company's debts will be settled and its operations restructured to ensure survival. * **Committee of Creditors (CoC)**: A group comprising financial creditors who collectively make decisions on the resolution plan for a corporate debtor. * **Insolvency and Bankruptcy Code, 2016 (IBC)**: India's primary law governing insolvency and bankruptcy proceedings. * **Functus Officio**: A legal term meaning an authority or officer whose duties have been fulfilled and whose power has ended. * **Compulsorily Convertible Debentures (CCDs)**: Debt instruments that are required to be converted into equity shares of the company at a later stage. * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's operating profitability.