The Supreme Court on Monday halted the liquidation proceedings of bankrupt Bhushan Power and Steel Limited, providing an interim relief to parent JSW Steel.

A bench of Justice B.V. Nagarathna and Justice Satish Chandra Sharma, passed a “status quo” order after briefly hearing JSW’s counsel Neeraj Kishan Kaul, who argued that liquidation proceedings would cause “serious prejudice” to his client, unless halted.

Moreover, JSW also has the right to file a review petition against the apex court’s May 2 judgment annulling the resolution of BPSL and ordering its liquidation, senior advocate Kaul added.

Under the law, the company has a right to file the review petition within 30 days which expires only June 2. JSW submitted that NCLT (National Company Law Tribunal) has appointed a liquidator to commence the liquidation proceedings even before that window closed.

Solicitor-general Tushar Mehta who appeared for the lenders (committee of creditors) of BPSL suggested that the NCLT may be asked to defer the matter till June 10 as banks that had taken money might find it difficult to return it.

The bench while ordering a status quo, said, “Without observing anything on the merits of the issue…we feel that the interests of justice would be subserved, and in order to avoid future complications in the matter, if there is a status quo of the pending proceedings before the…National Company Law Tribunal…”

The court also recorded JSW’S statement that it would file the review petition before the 30-days window.

The JSW stock reacted sharply after the status quo order was pronounced, gaining 2.31 per cent, or ₹23.25 a share, to close at ₹1031.75.

Billionaire Sajjan Jindal led JSW Steel holds a little over 83 per cent stake in BPSL, which operates a 4.5 million tonne steel plant in Odisha. The Jindal behemoth had acquired debt-laden BPSL with a ₹19,700 crore offer to creditors in 2021.

However, a bench of Justice Bela M Trivedi (since retired) and Justice Satish Chandra Sharma had quashed the resolution plan of JSW approved by the NCLT and affirmed by the NCLAT on the ground that there were flagrant violations of the Insolvency & Bankruptcy Code in implementation of the plan.

JSW has maintained that it has implemented the resolution plan for BPSL in compliance with law and taken all steps to revive the company to its present status today.

In a post results interview on Saturday with The Telegraph, Jayant Acharya, joint managing director and CEO of JSW Steel, said, JSW believed it has ‘strong grounds’ to seek legal remedies on BPSL and noted that the company’s downside as far as its investment in the subsidiary is ‘very well protected’ by the resolution plan itself.

In the apex court, JSW and BPSL were represented by Karnajwala & Co and AZB Partners, while senior advocate Dhruv Mehta appeared on behalf of BPSL’s ex-promoter Sanjay Singhal.