NCLAT rejects Vedanta’s challenge to approval of Adani’s resolution plan for Jaiprakash Associates

National Company Law Appellate Tribunal rejects Vedanta’s objection to lenders’ approval of Adani Enterprises ₹15,000 crore resolution plan for Jaiprakash Associates Ltd, there is no illegality in the decision of the committee of creditors (CoC).

The decision marks another defeat for Vedanta as the plan has already been approved by the National Company Law Tribunal.

The Delhi bench of the appellate court, headed by chief Justice Ashok Bhushan, had withdrawn its decision on April 22 after the completion of the hearings.

At the heart of the dispute was Vedanta’s appeal of the CoC decision, which approved Adani Group’s plan while rejecting Vedanta’s rival bid. Vedanta argued that its offer was pegged at approx. ₹17,000 crore was superior and offered better value but was scrapped in favor of Adani’s offer due to factors like upfront cash and faster payment times.

Also Read | Vedanta vs Adani: Jaiprakash case may test the limits of ‘commercial wisdom’

The company also questioned the limits of lenders’ “commercial wisdom” under the Insolvency and Bankruptcy Code (IBC), a principle that gives creditors broad discretion to choose resolution plans with limited judicial intervention.

Vedanta argued that the CoC failed to maximize value through a fair and transparent process. He said his offer translated to approx. ₹12,505.85 crore on a net present value (NPV) basis, making it the highest bid. Despite this, lenders confirmed that what Vedanta claimed was an undervalued plan, both from a headline and NPV perspective.

The company also alleged procedural deficiencies, stating that it was not given sufficient reasons for rejecting its offer or the opportunity to clarify its offer.

Vedanta also announced that it will offer an upfront cash amount of approx. ₹6,563 crore and equity transfer ₹800 crore, arguing that this would lead to a better recovery for lenders.

The decision was defended

On the other hand, the Supreme Court and the resolution expert defended the process, arguing that the decision was based on commercial considerations, including the certainty of payments and execution times.

Solicitor General Tushar Mehta, appearing on behalf of the CoC, alleged that information was leaked to Vedanta during the tender process. He argued that Vedanta revised its offer after realizing where it was lagging behind, especially on parameters such as upfront cash and equity infusion. In his opinion, this compromised the integrity of the process and the revised proposal was rightfully rejected because it was submitted after the deadline.

Senior advocate Abhishek Manu Singhvi, appearing for the resolution expert, also rejected Vedanta’s allegations. He said there was no basis to suggest that Vedanta was ever declared the highest bidder and was subsequently unfairly displaced.

Also Read | JAL bankruptcy case: Lenders point to ‘leakage’ that may have helped Vedanta bid

“The proposition that we declared Vedanta as the highest level and then changed it does not contain any ground truth,” Singhvi said before the court.

Vedanta’s lawyer Abhijeet Sinha denied the allegations, saying they were “baseless” and maintained that the company had submitted all relevant documents to the court. He maintained that Vedanta’s bid remained at the highest level after many rounds and accused the CoC of not being transparent in the scoring process.

“There was supposed to be some transparency in the scoring process but there was no transparency,” Sinha told the court during the hearings.

Mint The previously reported outcome of the case is important not only for the parties involved, but also for the broader bankruptcy framework. It will test the extent to which courts can scrutinize lenders’ decision-making, particularly where a higher offer is rejected in favor of one offering faster or more certain payments.

valuable assets

JAL’s assets make the competition particularly valuable. The company owns nearly 4,000 acres of land in Noida, Greater Noida and along the Yamuna Expressway, along with hotels, commercial assets, cement capacity and a Formula 1 race track near the upcoming Noida International Airport.

Adani Enterprises’ plan was approved by the Allahabad bench of the National Company Law Tribunal (NCLT) on March 17. Vedanta then moved both the NCLAT and the Supreme Court seeking a stay on the implementation of the scheme. While the Supreme Court refused to halt the process, it allowed the appeals court to continue hearing the matter.