In Appeal Against NCLT Order On Adani Plan For JAL, NCLAT Bars Invocation Of Subcontractor's Bank Guarantee For Six Months

The National Company Law Appellate Tribunal (NCLAT) in Delhi on Friday directed that the bank guarantee furnished by Velocity Enterprises, a subcontractor engaged by Jaiprakash Associates Limited (JAL) for erection and maintenance of substations, shall not be invoked for six months beyond its expiry on March 31, 2026.

The order came in the first appeal filed after the National Company Law Tribunal approved Adani Group's Rs 15,000-crore resolution plan for the company.

The matter was heard by a bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra.

The appeal was filed by Velocity Enterprises challenging the March 17, 2026 order of the Allahabad bench of the National Company Law Tribunal (NCLT), whereby the tribunal approved Adani Group's ₹15,000-crore resolution plan for Jaiprakash Associates Limited and rejected the appellant's claims.

Velocity, a Bhopal-based proprietorship firm, had claimed about Rs 1 crore for work executed as a subcontractor for JAL and also challenged the termination of its work order and the proposed invocation of the bank guarantee furnished in favour of the company.

According to the appellant, it continued carrying out work even after the commencement of the corporate insolvency resolution process (CIRP) of JAL, but payments were not made for the work performed. It was submitted that the work order was terminated after the appellant began demanding its dues.

The appellant had earlier approached the NCLT seeking protection against invocation of the bank guarantee, and interim protection had been granted. However, by its order dated March 17, 2026, the NCLT rejected the interlocutory applications, resulting in the protection against invocation of the bank guarantee coming to an end.

Before the appellate tribunal, counsel for JAL submitted that the bank guarantee could not be invoked earlier due to the interim protection granted by the NCLT and pointed out that the guarantee is due to expire on March 31, 2026. It was also submitted that the appellant should be directed to renew the bank guarantee.

Taking note of the submissions, the appellate tribunal observed that the restraint on invocation had been operating till the NCLT passed its order on March 17 and said, “let that operate some more time till we hear the matter”.

The NCLAT then directed that the Successful Resolution Applicant shall not invoke the bank guarantee for a period of six months from its expiry on March 31, 2026, and listed the appeal for further hearing.