India, May 4 -- The Supreme Court's decision to reject Jindal Steel Private Limited's (JSPL) 2021 takeover of Bhushan Steel Private Limited (BSPL) on procedural grounds and order the latter's liquidation should set alarm bells. BSPL's resolution was one of the biggest under the Insolvency and Bankruptcy Code (IBC), one of India's most important economic reforms under the first Narendra Modi government.

The court, while rejecting the acquisition, has accused both JSPL and the Committee of Creditors of violating IBC's guidelines. The fact that this judgment has come after years of JSPL's acquisition - the company has invested money in the project and got it running - sets a bad precedent for the credibility of the IBC itself. Some of the d...