Article 142 Supreme Court Ruling: 5 Shocking Implications for India’s Legal System and Business Future

The Supreme Court recently invoked Article 142—a constitutional provision empowering it to ensure “complete justice”—to order the liquidation of Bhushan Power & Steel Ltd. (BPSL), bypassing the National Company Law Tribunal (NCLT), the designated authority under the Insolvency and Bankruptcy Code (IBC). This unprecedented move, aimed at resolving an eight-year insolvency deadlock, highlights Article 142’s role in addressing systemic inefficiencies but has reignited debates about judicial overreach.

Critics, including Vice-President Jagdeep Dhankhar, argue such rulings risk undermining legislative and executive domains, likening the provision to a “nuclear missile” against democratic processes. Supporters, however, contend it’s vital to correct prolonged legal delays, especially in India’s overburdened insolvency framework. The case underscores tensions between judicial intervention and constitutional boundaries, setting a precedent that could reshape corporate insolvency outcomes while challenging the separation of powers.

As the judiciary navigates this delicate balance, the ruling emphasizes the need for cautious, principled application of Article 142 to uphold justice without encroaching on India’s democratic structure. 

Article 142 Supreme Court Ruling: 5 Shocking Implications for India’s Legal System and Business Future

The Supreme Court’s recent directive to liquidate Bhushan Power & Steel Ltd. (BPSL) under Article 142 of the Constitution has reignited debates about judicial authority, legislative boundaries, and the pursuit of “complete justice.” Here’s a deep dive into the implications of this decision and why it matters.  

What Happened in the BPSL Case? 

In May 2025, the Supreme Court invoked Article 142 alongside Section 33(1) of the Insolvency and Bankruptcy Code (IBC) to order the National Company Law Tribunal (NCLT) to initiate liquidation proceedings against BPSL. This was unusual because the IBC explicitly designates the NCLT—not the Supreme Court—as the adjudicating authority for insolvency matters. The court justified its intervention to ensure “complete justice,” citing delays and complexities in the eight-year-long insolvency process.  

Article 142: The Judiciary’s “Nuclear Option” 

Enacted on May 27, 1949, Article 142 grants the Supreme Court extraordinary powers to pass orders or decrees necessary to deliver justice in pending cases. Key features include:  

• Scope: Applies to any cause or matter before the court.  

• Enforcement: Binding across India, even in the absence of parliamentary laws.  

• Flexibility: Used to fill legislative gaps or address unique circumstances. 

A 2024 IIM Ahmedabad study found Article 142 referenced in 1,579 cases (1950–2023), with explicit use in 791 instances, often in civil disputes.  

When Does the Supreme Court Use Article 142? 

The provision is typically deployed in scenarios where:  

• Existing Laws Are Silent: For example, the court used it to recognize transgender rights in the NALSA v. Union of India (2014) case.  

• Public Interest Demands Urgency: Such as environmental directives to curb air pollution.  

• Prolonged Litigation Needs Resolution: Recently, the court modified arbitral awards to end protracted disputes. 

In the BPSL case, the court bypassed the NCLT’s traditional role, signaling frustration with inefficiencies in India’s insolvency framework.  

Criticism: Judicial Overreach or Necessary Intervention? 

The BPSL ruling has drawn mixed reactions:  

• Supporters argue that Article 142 is vital to correct systemic delays, especially in India’s overburdened insolvency ecosystem.  

• Critics, including Vice-President Jagdeep Dhankhar, accuse the judiciary of acting as a “super Parliament.” Dhankhar recently likened Article 142 to a “nuclear missile against democratic forces,” particularly after the court imposed a 3-month deadline for the President to decide on pending state bills. 

Legal experts like former Attorney General K.K. Venugopal acknowledge its benefits but stress the need for restraint to avoid undermining legislative and executive domains.  

Why the BPSL Case Matters 

• Precedent for Insolvency Cases: The decision could encourage more judicial intervention in stalled IBC processes, potentially speeding up resolutions.  

• Separation of Powers Debate: It highlights tensions between the judiciary’s duty to deliver justice and constitutional boundaries.  

• Corporate Impact: Businesses may face unpredictability if courts sidestep established insolvency protocols. 

The Road Ahead: Striking a Balance 

While Article 142 is indispensable for addressing gaps in India’s legal framework, its application requires caution. Clear guidelines—such as the Supreme Court’s 2023 emphasis that Article 142 cannot override statutory laws—could mitigate overreach risks. For now, the BPSL case underscores the judiciary’s resolve to prioritize justice over procedural rigidity, even as it navigates accusations of crossing constitutional lines.  

In essence, Article 142 remains a powerful tool for justice, but its use must evolve alongside checks to preserve India’s democratic balance.