NCLT Allahabad Reserves Verdict On Vedanta Plea Against CoC Approval Of Adani's JAL Plan

The National Company Law Tribunal at Allahabad has reserved its orders on Vedanta Limited's challenge to the Committee of Creditors' approval of Adani Enterprises' resolution plan for insolvent Jaiprakash Associates Limited.

Vedanta was one of the resolution applicants in the process.

The matter was heard by Judicial Member Praveen Gupta and Technical Member Ashish Verma, who reserved orders after hearing Vedanta and the Resolution Professional.

Vedanta has sought a direction to send the approved resolution plan back to the lenders for fresh consideration.

The challenge centres on the CoC's rejection of an “addendum” submitted by Vedanta to its resolution plan. Vedanta alleged that the lenders failed to exercise independent commercial wisdom and acted under the “undue influence” of the Resolution Professional and legal advisors.

According to Vedanta, the addendum was submitted within time. It claimed that rejecting it deprived stakeholders of nearly Rs. 3,400 crores in additional value.

“The CoC lost the benefit of ₹3,400 crores in approving a resolution plan which is short by that amount,” Senior Advocate U.K. Chaudhary, appearing for Vedanta, submitted.

Vedanta argued that it had locus standi, having participated since inception. It contended that the CoC refused to consider the addendum solely because legal advisors warned that accepting it could trigger writ petitions. That advice, it said, compromised the CoC's “open mind.”

Relying on Supreme Court precedents in Binani Industries and Essar Steel, Vedanta submitted that the Process Note and the Request for Resolution Plan are “guidelines” and “not cast in stone.” and therefore their addendum could have been considered.

“The CoC has enough power to deal with these documents and dispense with them,” Chaudhary argued. He added that commercial wisdom is supreme but “must not lose sight of the guiding stars of value maximisation and upholding stakeholder interests.”

Senior Advocate Arun Kathpalia, appearing for the Resolution Professional, opposed the plea.

Vendanta's argument, he said, is "please find fault with the CoC and RP for following the Process Note and RFRP truthfully,”

Kathpalia argued that the CoC cannot “sit in a silo” without legal advice. He said “value maximisation is not divorced from time.” He stressed that the Insolvency and Bankruptcy Code mandates a time-bound process and that the Process Note carries statutory sanctity.

Accepting Vedanta's addendum at that stage would amount to “cutting the cloth to suit Vedanta,” he argued. It would require restarting the process to ensure a level playing field.

Jaiprakash Associates was admitted into insolvency in June 2024 over a default of nearly Rs 4,000 crores. Claims admitted in the process now exceed Rs 55,000 crores. In the resolution process, Vedanta had emerged as the highest bidder with an offer of about Rs. 17,000 crores but lenders chose Adani Enterprises' plan on account of its stronger upfront payment terms, even though Vedanta's total bid was higher.