The Supreme Court’s decision to overturn JSW Steel’s acquisition of Bhushan Power and Steel stands as a textbook example of the law prevailing at the expense of justice. It reflects a pristine legalism that discounts the practicalities of commerce, investment confidence and the sanctity of concluded transactions. In a world where predictability is the bedrock of capital allocation, this judgment unsettles more than it settles. That the resolution has been struck down years after JSW assumed ownership, infused capital, and operationally revitalised the company is a deeply disquieting signal to the investor community and to those who believed in the promise of India’s insolvency framework.To be sure, the Court is within its remit to uphold the letter of the law. The flaws it pointed to are not insignificant. The NCLAT’s overreach into technical areas and the passive posture adopted by the Committee of Creditors have both contributed to the procedural dilution of the process. There were clear shortcomings on the part of the acquirer as well. Delays in meeting payment obligations to operational creditors and a lag in bringing in capital cannot be glossed over. Yet, the question must be asked — where was the alternative? Were there other credible bidders waiting in the wings? Were the interests of creditors better served by returning the company to liquidation? Is the commercial cost of this legal correction proportionate or justified?
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