In a significant ruling under India’s insolvency framework, the appellate tribunal in Delhi has upheld Adani Power Limited’s ₹4,000 crore resolution plan for Vidarbha Industries Power Limited, bringing an end to legal challenges against the deal.
The National Company Law Appellate Tribunal dismissed appeals filed by Western Coalfields Limited and employees of Vidarbha Industries Power Limited, which had questioned the approval of the resolution plan cleared earlier by the Mumbai bench of the National Company Law Tribunal.
After hearing all parties, the appellate tribunal found no legal infirmity in the approval granted to the plan submitted by Adani Power. It rejected the objections raised by the appellants and confirmed that the resolution process complied with the provisions of the Insolvency and Bankruptcy Code.
In its order, the tribunal said the objections lacked substance and failed to establish any breach of the law. Referring to employee and operational creditor claims, the ruling stated, “In view of the foregoing discussions, we are of the view that the pay outs to the operational creditor including the employees cannot be said to be violating the provisions of Section 30(2)(b) of the IBC. Appellants have not been able to prove any other violation in the approval of the resolution plan.”
The tribunal also observed that the resolution plan met all statutory requirements and that the Committee of Creditors had exercised its commercial wisdom in line with established legal principles. It noted that such commercial decisions, once taken in accordance with the law, cannot be interfered with lightly.
The appeals had challenged the earlier approval granted by the National Company Law Tribunal, Mumbai, which had cleared the acquisition of Vidarbha Industries Power Limited by Adani Power as part of the insolvency resolution process.
According to a law firm cited in the matter, the appellate ruling reinforces the settled position that courts and tribunals should not second-guess the commercial decisions of creditors unless there is a clear violation of the Insolvency and Bankruptcy Code.
The verdict effectively confirms the resolution of the 600 MW thermal power asset located at Butibori in Nagpur district of Maharashtra, clearing the way for Adani Power to take control of the stressed power project.
- Adani Power Limited
- Vidarbha Industries Power Limited
- National Company Law Appellate Tribunal
- National Company Law Tribunal
- Western Coalfields Limited
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