NEW DELHI — The corporate tussle over the bankrupt Jaiprakash Associates Ltd (JAL) has escalated to the appellate level. Anil Agarwal’s Vedanta Ltd has officially moved the National Company Law Appellate Tribunal (NCLAT), challenging the recent approval of Adani Enterprises Ltd’s ₹14,543 crore resolution plan.
The appeal follows a March 17 order by the NCLT Allahabad bench, which greenlit the Adani bid despite fierce opposition from Vedanta.
The Core Dispute: Value vs. Execution
Vedanta’s challenge hinges on the interpretation of the Insolvency and Bankruptcy Code (IBC) and the principle of “maximizing value” for creditors.
-
The “Highest Bidder” Argument: Vedanta claims it emerged as the highest bidder with an offer of ₹12,505.85 crore on a Net Present Value (NPV) basis. It alleges the approved Adani plan is lower by approximately ₹500 crore in NPV and ₹3,400 crore in total value.
-
Allegations of Conspiracy: Vedanta has labeled the approval a “commercial conspiracy,” arguing that its improved offer—which included ₹6,563 crore in upfront cash—was unfairly ignored.
-
Procedural Fairness: The mining giant contends it was denied the opportunity to clarify its proposal, while the Committee of Creditors (CoC) maintains that Vedanta’s revised offer arrived after the official bidding deadline.
Why Lenders Preferred Adani
The Committee of Creditors (CoC) defended their decision by emphasizing that “headline value” is not the sole criteria for selection. Their preference for Adani Enterprises was based on:
-
Speed of Recovery: Adani’s plan promises payments within a two-year window, whereas Vedanta’s timeline stretched to five years.
-
Upfront Liquidity: Adani offered approximately ₹6,000 crore in upfront cash, providing immediate relief to lenders.
-
Feasibility: Lenders argued that the commercial wisdom of the CoC allows them to prioritize execution certainty over the highest theoretical offer.
The Legal Outlook: “Commercial Wisdom”
Legal experts suggest that Vedanta faces an uphill battle. The Supreme Court has repeatedly upheld that the “commercial wisdom” of the CoC is paramount and generally beyond judicial review unless a clear procedural or legal violation is proven.
“The NCLAT does not act as a super-CoC to compare bids. Its role is limited to checking whether the process followed the IBC,” noted Ankita Singh, founder of Sarvaank Associates.
What’s Next?
The NCLAT, led by Chairperson Justice Ashok Bhushan, is expected to hear the matter on Monday. The tribunal will determine if the NCLT’s 17 March order adhered to the statutory requirements of the IBC or if there was indeed a “procedural flaw” that warrants a reconsideration of the bids.
