Insolvency and Bankruptcy Code (IBC) – SC Clears JSW Steel’s Acquisition of BPSL

Insolvency and Bankruptcy Code

Insolvency and Bankruptcy Code (IBC) Latest News

  • The Supreme Court of India has approved JSW Steel’s $2.3 billion (₹19,350 crore) acquisition of Bhushan Power and Steel (BPSL), reversing its earlier decision of liquidation
  • This judgment strengthens the Insolvency and Bankruptcy Code (IBC), 2016, by prioritising revival of distressed firms over liquidation.

Understanding Insolvency and Bankruptcy and the IBC

  • Insolvency vs Bankruptcy: While insolvency results from an inability to pay debts due to a lack of assets, bankruptcy occurs when an application is presented to an authority declaring insolvency and requesting to be declared bankrupt, which will last until discharge.
  • About the IBC 2016: 
    • It is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. 
    • It is a one stop solution for resolving insolvencies which previously was a long process that did not offer an economically viable arrangement. 
    • It aims to protect the interests of small investors and make the process of doing business less cumbersome.
  • Insolvency and Bankruptcy Board of India (IBBI):
    • It is the regulator for overseeing insolvency proceedings and entities like Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU) in India. 
    • It was established on 1 October 2016 and given statutory powers through the IBC 2016. 
    • It functions under the Ministry of Corporate Affairs and covers Individuals, Companies, Limited Liability Partnerships and Partnership firms. 

Process Followed under the IBC

  • Initiation of CIRP:
    • Corporate Debtor (CD): A company that has taken loans and defaults on repayment.
    • Who can Apply: Either the creditor or the debtor can initiate proceedings.
    • Relevant Section: Corporate Insolvency Resolution Process (CIRP) is governed by Section 6 of the IBC.
  • Threshold for default:
    • Earlier limit: ₹1 lakh default.
    • Revised limit: Raised to ₹1 crore during the pandemic to reduce undue stress on companies.
  • Adjudicating Authority (AA):
    • Designated authority: National Company Law Tribunal (NCLT) benches across India.
    • Role: Receives insolvency applications from creditors or debtors.
    • Timeline: Must admit or reject application within 14 days, with reasons for delay if not disposed within this period.
  • Commencement of CIRP:
    • Trigger point: CIRP begins once NCLT admits the application.
    • Resolution timeline: As per amendment, the process must be completed within 330 days (including litigation period).
  • Outcome of CIRP:
    • Resolution: Revival of the corporate debtor through restructuring or takeover by a Successful Resolution Applicant (SRA).
    • Liquidation: If no resolution plan is approved within the stipulated period.

Supreme Court’s Ruling

  • Revival of BPSL: JSW Steel has invested in modernisation, safeguarded thousands of jobs, and ensured that the company will continue to operate.
  • IBC objective fulfilled: The court emphasised that the essence of IBC is to convert loss-making firms into profitable entities.
  • On claims: Creditors’ demand for an additional ₹6,100 crore was dismissed. The Court stated that once the Committee of Creditors (CoC) approves a plan, reopening claims undermines the law.
  • CCDs as equity: Compulsorily Convertible Debentures (CCDs) issued by the Successful Resolution Applicant (SRA) must be treated as equity.

Background

  • The SC had earlier ordered liquidation, citing JSW Steel’s delay in implementing the plan and failure of CoC to exercise its commercial wisdom.
  • The court criticised the Resolution Professional (RP) and CoC for failing to protect creditors’ interests and supporting JSW despite violations.
  • The (May 2024) order unsettled investors and cast doubts on the effectiveness of IBC reforms.

Importance of BPSL to JSW Steel

  • BPSL contributes significantly to JSW’s revenue and profitability. FY25 performance - Profit of ₹300 crore (Q1), loss of ₹93 crore (Q2), profit of ₹11 crore (Q3).
  • BPSL increased capacity from 3.5 MTPA to 5 MTPA, operating advanced facilities across India.
  • Analysts estimate an 8–10% revenue and EBITDA decline in FY26 if BPSL is liquidated.

Liquidation Trends and Broader Implications of Judgment

  • Rising liquidations: FY24 witnessed 2,476 cases ending in liquidation with total claims of ₹11 lakh crore. Recovery rate remained only 6.33% of admitted claims (₹69,634 crore).
  • Example of Jet Airways: Earlier, Jet Airways faced liquidation due to a failed resolution plan (₹15,723 crore admitted claims).
  • Liquidation of BPSL: This would have been the largest in corporate history.
  • The judgment: This is expected to restore investor confidence in IBC and discourage frivolous delays.

Conclusion

  • The Supreme Court’s reversal aligns with the spirit of the IBC by prioritising corporate revival over liquidation. 
  • The ruling will likely strengthen creditors’ trust in resolution plans, reduce litigation uncertainties, and boost investor confidence in India’s insolvency ecosystem. 
  • Going ahead, stricter accountability for Resolution Professionals and CoCs is essential to prevent delays and safeguard creditors’ interests.

Source: IE

Insolvency and Bankruptcy Code FAQs

Q1: How does the recent Supreme Court ruling on JSW Steel’s acquisition of Bhushan Power and Steel reinforce the objectives of the IBC?

Ans: It upholds IBC’s core objective of reviving distressed assets into going concerns while protecting jobs and maximising asset value.

Q2: Why did the Supreme Court dismiss creditors’ additional demand in the BPSL case?

Ans: This would undermine the finality of resolution plans and violate IBC provisions.

Q3: What role does Bhushan Power and Steel play in JSW Steel’s revenue profile?

Ans: BPSL contributes significantly to JSW’s revenue and profits, with liquidation projected to cause an 8–10% decline in revenue in FY26.

Q4: What was the SC’s earlier criticism in the JSW–BPSL case?

Ans: The SC highlighted CoC’s failure to exercise commercial wisdom, protect creditors’ interests, and ensure compliance with IBC norms.

Q5: What do the liquidation trends under IBC indicate?

Ans: The data highlights systemic delays and weak enforcement in the resolution process.

India-US Nuclear Energy Talks Face Hurdles Over Liability Laws

India-US Nuclear Deal

India-US Nuclear Deal Latest News

  • During renewed trade negotiations in New York, Commerce Minister Piyush Goyal highlighted India’s energy security vision, which will involve strong collaboration with the United States, especially in small modular reactor (SMR) technologies and broader nuclear energy cooperation.
  • However, progress faces hurdles due to unresolved legal issues, particularly India’s nuclear liability framework, which has long discouraged US firms from entering the Indian nuclear market. 
  • Addressing these liability concerns is essential but remains a complex challenge, making expansion in nuclear cooperation easier said than done.

US Regulatory Clearance Boosts Indo-US Nuclear Prospects

  • In March, the US Department of Energy (DoE) granted Holtec International regulatory clearance under the restrictive 10CFR810 rule, a long-standing hurdle in Indo-US nuclear cooperation.
  • The approval conditionally permits Holtec to transfer unclassified small modular reactor (SMR) technology to its subsidiary Holtec Asia, as well as Indian firms Tata Consulting Engineers and Larsen & Toubro.
  • Previously, 10CFR810 regulations barred US companies from manufacturing nuclear equipment or conducting nuclear design work in India, blocking New Delhi’s aim to co-produce SMRs for domestic needs. 
  • The clearance removes this roadblock, paving the way for collaboration.
  • Now, the onus shifts to India, which must pass pending legislative amendments — particularly to its liability law and the Atomic Energy Act — to unlock foreign investment.

Key Amendments to India’s Nuclear Liability Framework

  • India is working on a set of 11 amendments to its Civil Liability for Nuclear Damage Act, 2010 (CLNDA) to attract foreign investment and ease vendor concerns.

Section 17(b) – The Main Obstacle

  • Section 17 of CLNDA allows nuclear plant operators to seek compensation from suppliers after paying damages for an accident
  • Specifically, Section 17(b) gives operators a “right of recourse” if an incident results from defective or substandard equipment supplied.
    • Foreign vendors like Westinghouse Electric (US) and Framatome (France) argue this provision is stricter than global norms, exposing them to unlimited liability.
    • Since its enactment, no foreign company has invested in India’s nuclear projects, fearing financial risks.
    • Even domestic sub-suppliers like L&T and Walchandnagar Industries are wary, as the term “supplier” is too broad and could include small vendors.

Proposed Amendments

  • The government is considering:
    • Diluting Section 17(b) to bring it in line with international nuclear liability laws.
    • Clarifying the definition of “supplier” to exclude sub-suppliers from automatic liability.
    • Capping vendor liability, both in monetary terms (limited to contract value) and by time frame, so risks do not extend indefinitely.

Regulatory Safeguards

  • Officials note that the Atomic Energy Regulatory Board (AERB) already vets all projects and can ensure right of recourse is explicitly written into contracts. 
  • This safeguard could balance accountability while easing investor fears.

Opening India’s Nuclear Sector to Private Participation

  • India is preparing sweeping reforms to allow private and potentially foreign companies to participate in nuclear power generation — a sector long reserved for state-owned operators. 

Amendment to the Atomic Energy Act, 1962

  • The government plans to amend the Atomic Energy Act, 1962, which currently restricts nuclear plant operations to public sector entities like NPCIL and NTPC Ltd. 
  • The proposed reform would:
    • Enable private firms to enter nuclear power generation.
    • Allow for minority equity stakes by foreign companies in upcoming nuclear projects at a later stage.
    • Expand the sector’s capacity by leveraging private investment and technology.

Link to Indo-US Civil Nuclear Deal

  • Nearly two decades after the Indo-US civil nuclear agreement, these reforms are seen as crucial to unlocking its commercial potential. 
  • New Delhi also hopes to present this move as part of its broader trade and investment partnership with Washington, complementing ongoing India–US trade negotiations.

Aligning India’s Nuclear Laws with Global Norms

  • India is moving to amend its Civil Liability for Nuclear Damage Act (CLNDA) to align more closely with the 1997 Convention on Supplementary Compensation for Nuclear Damage (CSC)
  • These changes are aimed at easing investor concerns, clarifying ambiguities, and bringing India fully into the global nuclear liability regime.

Compliance with the CSC

  • India signed the CSC in 2010 and ratified it in 2016, despite not being a member of the Vienna (1963) or Paris (1960) Conventions
  • The proposed amendments to CLNDA will:
    • Harmonise India’s framework with CSC provisions and annexures.
    • Strengthen India’s standing as a CSC-compliant state party, ensuring compatibility with international liability norms.

Clarification of “Supplier”

  • A major issue has been ambiguity in the definition of “supplier” under Rule 24 of CLND Rules. The rules state a supplier may include:
    • A manufacturer providing systems, equipment, or structures.
    • A vendor responsible for design and quality assurance.
    • Providers of quality assurance or design services.
  • However, uncertainty remains on whether this applies only to reactor suppliers like Westinghouse or also to small vendors, such as an electrical package provider in a Rs 1 crore contract. 
  • The amendments seek to clearly define supplier responsibilities, easing fears of unlimited liability for smaller sub-vendors.

Conclusion

  • These amendments are an economic necessity to attract foreign and domestic investment into India’s nuclear sector. 
  • Still, the biggest challenge will be forging political consensus in Parliament to pass the reforms, which may now be delayed beyond the monsoon session.

Source: IE

India-US Nuclear Deal FAQs

Q1: What did Commerce Minister Piyush Goyal highlight in US talks?

Ans: He flagged India’s energy security vision, stressing collaboration with the US in nuclear energy and small modular reactor (SMR) technologies.

Q2: What regulatory clearance did the US grant recently?

Ans: The US DoE cleared Holtec International to share SMR technology with Indian firms, removing a key hurdle under restrictive 10CFR810 regulations.

Q3: Why is Section 17(b) of CLNDA controversial?

Ans: It gives operators a right of recourse against suppliers for defective equipment, deterring foreign vendors like Westinghouse from investing in India’s nuclear sector.

Q4: What reforms are planned under the Atomic Energy Act?

Ans: Amendments would allow private and possibly foreign companies to enter nuclear generation, breaking the state monopoly of NPCIL and NTPC Ltd.

Q5: Why are these amendments considered urgent?

Ans: They are seen as an economic necessity to attract foreign investment, align India with global nuclear norms, and unlock the potential of the Indo-US nuclear deal.

India Calls for Major UN Reforms to Address Global Crises

UN Reforms

UN Reforms Latest News

  • India’s External Affairs Minister S. Jaishankar addressed the 80th session of the UN General Assembly. 
  • During this speech, he emphasised that the UN must be reformed and member states — led by active Global South contributors like India — must strengthen cooperation, confront terrorism, and restore multilateral credibility to meet 21st-century challenges.

UN General Assembly

  • The UN General Assembly (UNGA) is the main deliberative, policymaking and representative organ of the United Nations.
  • All 193 UN member states are members (each with one vote). The Holy See and Palestine are permanent observers.
  • It provides a global forum for multilateral discussion of international issues — peace & security, development, human rights, international law, budgetary and administrative matters.

Working

  • It holds an annual Regular Session (High-Level Week in September) plus Special and Emergency Special Sessions when required.
  • Structure: Six Main Committees handle substantive work:
    • Disarmament & International Security
    • Economic & Financial
    • Social, Humanitarian & Cultural
    • Special Political & Decolonization
    • Administrative & Budgetary
    • Legal
  • President & Bureau: A President (elected for one year) chairs sessions and sets procedural priorities; elected from different regional groups on rotation.

Decision-Making & Voting

  • Important questions (admission of members, budget, peace & security recommendations) normally require a two-thirds majority.
  • Other questions require a simple majority.
  • Nature of GA decisions: Most resolutions and declarations are non-binding politically influential instruments; binding enforcement is typically the Security Council’s domain.

Key Powers & Functions

  • Approve the UN budget and apportion member contributions.
  • Elect non-permanent members of the Security Council, members of other UN bodies and the judges of the ICJ (in conjunction with the Security Council).
  • Recommend appointment of the Secretary-General to the Security Council.
  • Create subsidiary organs and specialised agencies; convene world conferences.

Key Achievements & Historical Impact

  • Universal Declaration of Human Rights (1948): Adopted by UNGA — foundational text in international human rights.
  • Decolonization: Adopted the 1960 Declaration on Granting Independence to Colonial Countries and Peoples and guided a major wave of decolonization through UN support and membership expansion.
  • Development agendas: Endorsed the Millennium Declaration (MDGs) and later the 2030 Agenda for Sustainable Development and the SDGs (2015) — global compacts for development.

The General Debate

  • The general debate is part of the General Assembly session and is held at the beginning of each regular session in September.
  • Purpose: Heads of state/government and ministers present national views and priorities and respond to global issues under a chosen theme.
  • Speaking order & practice: Traditionally Brazil speaks first, then the United States, followed by other states in order of request and protocol.
  • Theme of 80th session - Better Together: 80 years and more for peace, development and human rights.
  • Presidency of 80th session - Annalena Baerbock of Germany is the President of 80th UNGA being held in New York.

EAM Jaishankar at the UN — Key Points & Takeaways

  • EAM argued that the UN’s founding Charter calls for peace and human dignity, but the state of the world shows the organisation struggling to deliver.
  • He said that the global problems (conflict, climate, development, trade, terrorism) make a compelling case for more international cooperation — and urgent reform of multilateral institutions.

State of the world — Where the UN is Falling Short

  • Major conflicts: Cited Ukraine and the Middle East as evidence that the UN’s conflict-resolution role is under strain.
  • Development shortfalls: Slow progress on the Sustainable Development Goals; resources and delivery lag.
  • Climate credibility at risk: “If climate action itself is questioned, what hope is there for climate justice?” — concern over hollow commitments and creative accounting.
  • Economic friction: Rising tariff volatility, technology controls, supply-chain grip, and restricted labour mobility undermine open trade and require multilateral responses.

Terrorism — An Urgent, Shared Threat

  • Terrorism synthesises bigotry, violence, intolerance and fear and remains a priority.
  • India’s experience: living next to a state that is a centre for global terrorism underlines the urgency.
  • Required measures: choke terrorism financing, sanction prominent terrorists, and deepen international cooperation against sponsors and sympathisers.

UN Credibility & The Need for Reform

  • The UN is “in a state of crisis”: gridlock has reduced its ability to build common ground and weakened belief in multilateralism.
  • Security Council reform is essential — expand both permanent and non-permanent membership to reflect contemporary realities.

India and the Global South — Readiness to Lead

  • India stands ready to assume greater responsibilities, and the Global South must contribute more actively.
  • Cited India’s international role: development projects, crisis response, safe commerce, and security assistance.
  • Call for countries that can engage all sides (e.g., in Ukraine and the Middle East) to step up mediation and search for solutions.

Principles for Action — Cooperation, Empathy, Common Purpose

  • International cooperation must prevail; islands of prosperity cannot flourish in an ocean of turbulence.
  • A functioning world order requires common purpose and empathy — the UN should be the forum to enable that.
  • Reforming multilateralism is presented as the obvious, necessary path forward.

Source: TH | UN | UNGA

UN Reforms FAQs

Q1: Why is India calling for UN reforms?

Ans: India argues the UN is gridlocked, unable to address terrorism, climate action, and development effectively, and needs urgent reform to restore credibility.

Q2: What did Jaishankar highlight at the UNGA?

Ans: He emphasised terrorism, climate justice, economic frictions, and multilateral failures, urging collective action and reform of institutions like the UN Security Council.

Q3: How does India view its role in UN reforms?

Ans: India projects itself as a responsible Global South leader, ready to take greater responsibilities and strengthen cooperation for peace, development, and global security.

Q4: What reforms does India propose for the UN Security Council?

Ans: India advocates expanding both permanent and non-permanent membership to reflect contemporary realities and strengthen multilateral decision-making.

Q5: Why does terrorism remain central in India’s UN message?

Ans: India stressed its experience living next to a terrorism hub, calling for choking terror financing, sanctioning sponsors, and deeper global cooperation against extremism.

Cold Desert Biosphere Reserve – UNESCO Recognition

Cold Desert Biosphere Reserve

Biosphere Reserve Latest News

  • The Cold Desert Biosphere Reserve in Himachal Pradesh has been included in UNESCO’s World Network of Biosphere Reserves, making it India’s 13th site on the global list.

Introduction

  • In a significant recognition of India’s conservation efforts, UNESCO has designated the Cold Desert Biosphere Reserve in Himachal Pradesh as part of its prestigious World Network of Biosphere Reserves (WNBR). 
  • This inclusion marks a global acknowledgement of the ecological, cultural, and scientific importance of the fragile Trans-Himalayan ecosystem. 
  • With this addition, India now has 13 biosphere reserves listed under UNESCO, highlighting the country’s commitment to biodiversity protection and sustainable development.

About the Cold Desert Biosphere Reserve

  • The Cold Desert Biosphere Reserve spans 7,770 sq. km. across Himachal Pradesh’s Lahaul-Spiti district
  • Situated at altitudes ranging from 3,300 to 6,600 meters, the region represents one of the coldest and driest ecosystems in the world. 
  • It covers landscapes such as windswept plateaus, glacial valleys, alpine lakes, and high-altitude deserts.
  • The reserve integrates the Pin Valley National Park, Kibber Wildlife Sanctuary, Chandratal Wetland, and the Sarchu plains, making it a hub of biodiversity and cultural heritage. 
  • It is divided into three zones: core (2,665 sq. km), buffer (3,977 sq. km), and transition (1,128 sq. km), to balance conservation goals with sustainable community practices.

Biodiversity and Cultural Richness

  • The Cold Desert is home to a diverse range of flora and fauna. 
  • It harbours 732 vascular plant species, including 30 endemics and 47 medicinal herbs crucial to the traditional Sowa Rigpa (Amchi) healing system. 
  • Among its iconic fauna are the snow leopard, Himalayan ibex, blue sheep, Himalayan wolf, and several bird species like the golden eagle and Himalayan snowcock.
  • Around 12,000 residents inhabit scattered villages across the reserve. 
  • They continue to practice traditional pastoralism, yak and goat herding, and small-scale farming of barley and peas. 
  • The communities also maintain ancient Tibetan herbal medicine traditions, often guided by Buddhist monasteries and local councils that regulate the use of alpine resources.

Global and National Significance

  • The UNESCO designation underscores the urgent need to protect fragile Himalayan ecosystems, which face mounting challenges from climate change and unchecked tourism. 
  • It also elevates Himachal’s cold desert to global prominence, ensuring international cooperation in conservation, eco-tourism, and climate research.
  • The recognition came during the 37th session of UNESCO’s International Coordinating Council of the Man and the Biosphere (MAB) in Paris. 
  • Globally, UNESCO has added 26 new biosphere reserves across 21 countries this year, the highest number in two decades, expanding WNBR to 785 sites in 142 countries.

India’s Growing Biosphere Network

  • With the addition of the Cold Desert Biosphere Reserve, India’s tally of UNESCO-recognised biospheres has reached 13. 
  • This reflects the country’s broader strategy to align conservation with sustainable community development. 
  • India’s biospheres now include diverse ecosystems, from the Nilgiri and Sundarbans to the Great Nicobar and Pachmarhi.
  • Union Environment Ministry noted that this achievement follows the inclusion of two new Ramsar sites in India, bringing the country’s total wetlands of international importance to 93. 
  • The move reflects India’s consistent push to integrate ecological preservation with international frameworks.

Future Outlook

  • The UNESCO recognition is expected to encourage greater research collaborations, promote responsible tourism, and improve climate resilience strategies in high-altitude ecosystems. 
  • It also calls attention to India’s role in safeguarding fragile mountain landscapes that are both biodiversity hotspots and cultural treasures.
  • The designation strengthens the global narrative of balancing conservation with community livelihoods, offering India an opportunity to showcase its traditional knowledge systems, pastoral practices, and eco-cultural heritage.

Source : TH | IE

Biosphere Reserve FAQs

Q1: What is the Cold Desert Biosphere Reserve?

Ans: It is a 7,770 sq. km protected ecosystem in Himachal Pradesh’s Lahaul-Spiti district, now part of UNESCO’s World Network of Biosphere Reserves.

Q2: Why is the Cold Desert Reserve ecologically important?

Ans: It hosts rare species like the snow leopard, blue sheep, and Himalayan ibex, along with 732 plant species, including many medicinal herbs.

Q3: How many UNESCO biosphere reserves does India have now?

Ans: India now has 13 biosphere reserves listed under UNESCO’s World Network of Biosphere Reserves.

Q4: What cultural practices are linked to the reserve?

Ans: Local communities practice pastoralism, barley and pea farming, and Tibetan herbal medicine guided by Buddhist monastic traditions.

Q5: What global significance does the UNESCO listing bring?

Ans: It enhances international collaboration, eco-tourism opportunities, and climate resilience efforts in the fragile Himalayan ecosystem.

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