The National Company Law Appellate Tribunal (NCLAT) on Wednesday reserved its ruling on petitions filed by Vedanta Ltd challenging the selection of Adani Enterprises as the successful bidder for debt-laden Jaiprakash Associates Ltd (JAL) under the insolvency process.
A bench headed by Chairman Ashok Bhushan concluded the hearings after submitting detailed submissions from Vedanta, the resolution expert, the Committee of Creditors (CoC) and Adani Enterprises, directing the parties to submit written submissions within two days. While appearing for Vedanta, senior advocate Abhijit Sinha on Wednesday attacked the appraisal process adopted by the lenders, arguing that the insolvency resolution suffered from “serious lack of consideration of material aspects” and lack of transparency.
The key element of the challenge facing Vedanta is the large gap between competing bids. While the Adani Enterprises plan, which has been approved by lenders, is valued at $Vedanta offered Rs 14,535 crore $17,926 crore – a difference of approx $3,400 crores.
Sinha believes that such a difference goes to the heart of insolvency and bankruptcy law, which prioritizes value maximization. He asserted that Vedanta’s solution plan was not properly evaluated and that key components of its presentation were overlooked, indicating lack of application of mind by the CoC.
Previously, the Commerce Commission, represented by Solicitor General Tushar Mehta, had defended the decision, asserting that the process strictly adhered to IBC norms and that bidders had no vested right to be selected on the basis of the highest financial bid alone.
Mehta told the court that Vedanta had revised its offer after an alleged information leak, boosting parameters such as net present value and equity infusion where it had lagged earlier. However, the revised offer was submitted after the specified deadline and was therefore rejected. In accordance with the Code of Conduct, bids were evaluated based on a range of factors, including cash offered, feasibility and ability to implement, and not just on principal value.
For its part, Adani Enterprises said the challenge to the process was in fact an impermissible attempt to invite judicial scrutiny of the commercial prudence of the code of conduct. Senior Advocate Retin Rai submitted before the NCLAT that the resolution professional’s act of seeking clarifications or additional information from bidders on specific aspects cannot be termed as irregularity. He said such steps were part of the orderly resolution process and did not subvert the decision-making framework adopted by the lenders.
Ray also asserted that the evaluation criteria, which Vedanta attacked, were disclosed in advance and applied uniformly, having been accepted by all participating bidders initially. Regarding the revised offer made by Vedanta after the end of the challenge process, Adani maintained that accepting such an offer would have undermined the sanctity of the insolvency framework.
The Vedanta challenge comes in the wake of a series of setbacks before the NCLT, which approved Adani’s resolution plan on March 17, and the NCLAT, which refused to grant an interim stay on March 24. The matter also reached the Supreme Court, which earlier this month refused to intervene in the appeal proceedings, stating that the case arose from an interim stage.
