Committee of Creditors’ rejection of Vedanta’s Addendum and approval of Adani Enterprises’ Resolution Plan affirmed; Court emphasizes limited judicial interference in CoC decisions under IBC.
In a significant ruling on May 4, 2026, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, dismissed appeals filed by Vedanta Ltd., an unsuccessful resolution applicant, challenging the approval of the Resolution Plan of Adani Enterprises Ltd. in the insolvency resolution of Jaiprakash Associates Ltd. The Tribunal upheld the decisions of the Committee of Creditors (CoC) and the National Company Law Tribunal (NCLT), Allahabad Bench, affirming that the CoC’s commercial wisdom in approving a resolution plan is paramount and not subject to extensive judicial review.
The corporate insolvency resolution process (CIRP) of Jaiprakash Associates Ltd. commenced on June 3, 2024, following an application by ICICI Bank under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The Resolution Professional (RP), Shri Bhuvan Madan, invited multiple prospective resolution applicants, including Vedanta Ltd. and Adani Enterprises Ltd., to submit resolution plans. After receiving initial plans deemed sub-optimal, the CoC decided to conduct a Challenge Process to maximize value, allowing revised bids based on an Evaluation Matrix with quantitative and qualitative parameters.
Vedanta Ltd. emerged as the highest bidder on a Net Present Value (NPV) basis at Rs. 12,505.85 crores after five rounds of bidding, surpassing Adani Enterprises Ltd. However, after the closure of the Challenge Process, Vedanta submitted an Addendum seeking to modify its financial proposal by increasing upfront payment and equity infusion. The RP circulated the Addendum to the CoC members, who unanimously decided not to consider it, citing violations of the Process Note and Request for Resolution Plan (RFRP) terms that prohibit modifications after the Challenge Process closure.
The CoC evaluated all plans, including Vedanta’s original submission, on the comprehensive Evaluation Matrix. Though Vedanta had the highest NPV, Adani Enterprises scored higher overall due to better upfront cash recovery and qualitative parameters, leading to 93.81% vote share in favor of Adani’s plan. The NCLT approved this plan on March 17, 2026, rejecting Vedanta’s IA seeking to set aside the CoC’s decision.
On appeal, Vedanta contended that the Addendum was a mere clarification and that the CoC’s rejection was arbitrary and contrary to the IBC’s objective of value maximization. They argued the CoC abdicated jurisdiction in favor of BDO LLP, the professional advisor that scored the plans, and failed to transparently consider their plan.
The NCLAT analyzed the detailed Process Note, RFRP, and Evaluation Matrix, noting that the Addendum constituted a material modification, not a clarification, violating clear prohibitions on post-Challenge Process changes. The Tribunal emphasized that the CoC has wide discretion to approve any plan in its commercial wisdom and is not bound to accept the highest NPV or score. The evaluation process was found to be transparent, with professional advice from BDO LLP appropriately considered without abdication of CoC’s jurisdiction.
The Tribunal relied on authoritative Supreme Court precedents, including Swiss Ribbons Pvt. Ltd. v. Union of India (2019), Essar Steel India Ltd. v. Satish Kumar Gupta (2020), and the recent Torrent Power Ltd. v. Ashish Arjunkumar Rathi (2026) judgment, affirming limited judicial review of CoC decisions. It held that the NCLT’s approval of Adani’s plan complied with Section 30(2) and 31 of the IBC and the CIRP regulations, with no material irregularity or procedural impropriety found in the process.
The appeals by Vedanta Ltd. were accordingly dismissed, reinforcing the primacy of the CoC’s commercial wisdom, the binding nature of the Evaluation Matrix, and the finality of the Challenge Process in insolvency resolution under the IBC framework.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - The Committee of Creditors (CoC) in a Corporate Insolvency Resolution Process (CIRP) has paramount commercial wisdom in approving a Resolution Plan and is not bound to approve the plan with the highest Net Present Value (NPV) or highest score on the Evaluation Matrix - Unilateral modifications to the financial proposal after closure of the Challenge Process are impermissible and can be rejected by the CoC.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016, Section 7, Section 25(2)(h), Section 29A, Section 30(2), Section 30(4), Section 30(5), Section 31, Section 61(3); Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, Regulation 2(ha), Regulation 36B(2), Regulation 39(1A), Regulation 39(3), Regulation 39(3B); Request for Resolution Plan (RFRP) and Process Note clauses as applicable.
