NCLAT Reserves Verdict on Vedanta’s Challenge to Adani’s JAL Resolution Plan, Examines Limits of CoC’s Commercial Wisdom vs Value Maximisation
Introduction
The present matter, Vedanta Limited vs Adani Enterprises Limited (JAL Resolution Plan Appeal), is pending before the National Company Law Appellate Tribunal (NCLAT), where a Bench comprising Chairperson Ashok Bhushan and Technical Member Braun Mitra reserved orders on 22 April 2026. The appeal challenges the approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016, raising critical issues concerning value maximisation and the scope of the Committee of Creditors’ commercial wisdom.
Factual Background
The dispute arises out of the Corporate Insolvency Resolution Process (CIRP) of Jaiprakash Associates Limited (JAL), a company engaged in construction, cement, and hospitality sectors, which had been under financial stress and was admitted into insolvency on a petition filed by ICICI Bank. During the CIRP, multiple resolution applicants submitted bids, including Vedanta Limited and Adani Enterprises Limited. Vedanta submitted a bid of approximately ₹17,000 crore, which it claimed was higher than Adani’s ₹15,000 crore offer.
Despite this, the Committee of Creditors (CoC) approved Adani’s resolution plan, citing factors such as stronger upfront payment, certainty of recovery, and overall commercial feasibility. The National Company Law Tribunal (NCLT), Allahabad Bench, approved Adani’s plan on 17 March 2026 while rejecting Vedanta’s proposal.
Procedural Background
Aggrieved by the approval of Adani’s resolution plan, Vedanta filed an appeal before the NCLAT challenging the NCLT’s order. The appellate tribunal had earlier declined to stay the implementation of the approved plan. Vedanta approached the Supreme Court of India, which refused to interfere with the NCLAT’s interim order. Subsequently, detailed arguments were heard by the NCLAT, and the matter was reserved for judgment on 22 April 2026.
Issues
1. Whether the CoC’s approval of Adani’s resolution plan violated the principle of value maximisation under the IBC.
2. Whether Vedanta’s higher bid, in terms of overall value or net present value, was arbitrarily disregarded.
3. Whether the CoC’s commercial wisdom is subject to judicial scrutiny in cases of alleged lack of transparency or fairness.
Contentions of Parties
Vedanta contended that its resolution plan offered the highest value, including superior net present value, and should have been selected in accordance with the objective of value maximisation under the IBC.
It was argued that the CoC’s decision-making process lacked transparency and predictability, and that the evaluation matrix was used in a manner that created only an illusion of value maximisation. Senior Advocate Abhijeet Sinha submitted that the CoC does not enjoy unfettered discretion and must act in a fair and rational manner.
Vedanta further asserted that disregarding the highest bid undermines the integrity of the insolvency process and discourages competitive bidding.
On behalf of the resolution professional, Senior Advocate Abhishek Manu Singhvi contended that Vedanta’s claim of being the highest bidder was based on incomplete understanding of the valuation process, and that the evaluation exercise was not concluded at the stage relied upon by Vedanta.
Representing the CoC, Senior Advocate Tushar Mehta argued that the appeal was a vexatious attempt by an unsuccessful bidder to reopen a concluded resolution process. He emphasized that the CoC’s decision was based on holistic commercial considerations and not merely on headline bid value.
Counsel for Adani Enterprises argued that Vedanta’s revised bid, submitted through an addendum, raised concerns regarding timing and fairness. It was submitted that the process documents clearly indicated that selection would depend on overall commercial evaluation rather than solely on net present value.
Reasoning and Analysis
The NCLAT noted that arguments from all parties had been concluded and that the matter required careful consideration of competing principles under the IBC. The case raises a fundamental tension between the doctrine of value maximisation and the established principle that the CoC’s commercial wisdom is generally non-justiciable. While Vedanta emphasized quantitative superiority of its bid, the respondents highlighted qualitative factors such as certainty, structure of payments, and feasibility.
The tribunal appeared to engage with the question of whether the CoC’s discretion is absolute or subject to limited judicial review in cases alleging arbitrariness or lack of transparency. The submissions also brought into focus the role of evaluation matrices and whether deviation from highest bid value can be justified on broader commercial grounds.
Additionally, concerns regarding procedural fairness, timing of revised bids, and alleged information asymmetry were raised, indicating that the tribunal may examine whether the process adhered to principles of fairness embedded in the insolvency framework.
Decision
The NCLAT reserved its order after completion of arguments. The final determination on the validity of the resolution plan and the scope of CoC’s commercial discretion remains pending.
In this case the RP was represented by Senior Advocate Abhishek Manu Singhvi.