Crime Today News
Post the Supreme Court ruling on JSPL-Bhushan Steel, the Parliamentary Standing Committee on Finance — a department related standing committee — has convened two days meeting on May 29-30 to discuss present status on Insolvency and Bankruptcy Code.
The Committee, headed by senior Parliamentarian and BJP MP from Odisha, Bhartruhari Mahtab, comprises of 21 members from Lok Sabha and 10 members from Rajya Sabha. The two-day meeting will discuss on a ‘Review of working of Insolvency and Bankruptcy Code and Emerging Issues’.
On day 1, officials from the Corporate Affairs Ministry will give a briefing. On the same day, officials from Punjab National Bank, Canara Bank and Union Bank of India will present oral evidence.
On day 2, the committee will collect oral evidence from the officials of Insolvency and Bankruptcy Board of India.
The meeting holds critical importance following the Supreme Court’s recent decision to cancel the Sajjan Jindal-led JSW Steel’s acquisition of Bhushan Power & Steel (BPSL). It also ordered the banks involved to return ₹19,700 crore, while JSW Steel will hand over BPSL to the banks for liquidation. Experts feel the ruling is a big blow not only for the company but also a setback for the resolution of stressed assets under the Insolvency and Bankruptcy Code. Additionally, the banks involved now face the prospect of having to make provisions for the amount recovered as part of the bankruptcy process.
It may be noted that a group of lenders led by Punjab National Bank (PNB) had claimed ₹47,204 crore as unpaid loan and following the default, the lenders dragged BSPL to insolvency proceedings. JSW Steel completed the acquisition of BPSL in March 2021, making it the largest steelmaker in the country. The Sajjan Jindal-led company paid ₹19,700 crore to the financial creditors of BPSL, which owed over ₹47,204.51 crore to lenders. Post the SC ruling, banks may be required to make provisions starting this quarter (Q1) of FY25–26, which could dent their profitability.
There is opinion that SC ruling serves as a stark reminder that even completed acquisitions remain vulnerable in the absence of strict and unequivocal adherence to the letter of the IBC. “The ruling also stressed that applicants for the resolution need to inject genuine capital and cannot sidestep their obligation through complex financial structures,” said Anju Thomas, Associate Partner, AQUILAW. Similarly, Shiju PV, Senior Partner at IndiaLaw LLP said the SC judgment reinforces a crucial principle under the IBC that a resolution plan must offer certainty, finality and timely value realisation for creditors. The bidders need not be discouraged solely because there are pending criminal cases against promoters, he added.
Published on May 19, 2025
This article first appeared on The Hindu Business Line
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