NCLAT’s Judgment Rejecting Vedanta’s Appeal In Jaypee’s CIRP

In a recent judgment in Vedanta Limited v. Bhuvan Madan, Resolution Professional of Jaiprakash Associates Limited [Company Appeal (AT) Insolvency Nos. 552 & 553 of 2026], the National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”), considered the extent to which the commercial wisdom of the committee of creditors (“CoC”) may be questioned where the approved resolution plan is alleged to offer lower value than a competing plan.

The appeal arose from the approval of the resolution plan submitted by Adani Enterprises Limited (“Adani”) in the corporate insolvency resolution process (“CIRP”) of Jaiprakash Associates Limited (“JAL”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”), in preference to the plan submitted by Vedanta Limited (“Vedanta”), which claimed to have offered higher gross value and higher net present value (“NPV”).

Dismissing the challenge, the NCLAT reaffirmed that value maximisation is an important objective of the IBC, but it does not displace the primacy of the CoC’s commercial wisdom. It was held that value may legitimately be assessed by reference to multiple commercial considerations, including timing of recovery, feasibility, viability and certainty of implementation, and not merely by the highest NPV.

Factual Background

CIRP was initiated against JAL on June 3, 2024 pursuant to an application filed by ICICI Bank Limited under Section 7 of the IBC before the National Company Law Tribunal, Allahabad Bench (“NCLT”). Pursuant to the resolution process, the RP issued the Request for Resolution Plan (“RFRP”), which prescribed the process for submission and evaluation of resolution plans and contained an evaluation matrix setting out the parameters on which the plans would be assessed (“Evaluation Matrix”).

After reviewing the initial plans, the CoC was of the view that these plans were sub-optimal and that there was scope for value maximisation. Accordingly, the CoC decided to conduct a challenge process i.e. a competitive bidding process to identify the highest committed financial proposal on NPV basis (“Challenge Process”). In the Challenge Process only Adani and Vedanta participated and at the conclusion of the Challenge Process, the resolution applicants were informed that the highest financial proposal received was of INR 12,505.85 crore on NPV basis, which was the bid submitted by Vedanta. However, the resolution applicants were also informed that each resolution plan would thereafter be evaluated as a whole by the CoC in accordance with the IBC, the RFRP and the Evaluation Matrix.

The final resolution plans were subsequently considered by the CoC along with the evaluation report prepared by BDO India LLP (“BDO”), which had been engaged to evaluate feasibility and viability of the plans. As per the Evaluation Matrix, Adani’s resolution plan secured a score of 89.76 out of 100, whereas Vedanta’s resolution plan secured a score of 75.60 out of 100.

All resolution plans were put to vote in accordance with the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) and the CoC approved Adani’s resolution plan with 93.81% voting share. The RP filed an application before the NCLT for approval of Adani’s resolution plan. Vedanta also filed an application before the NCLT challenging the decision of the CoC approving Adani’s plan. The NCLT rejected Vedanta’s challenge and approved Adani’s resolution plan, leading to the appeal before the NCLAT.

Key Issues and Decision

Value Maximisation

Vedanta contended that the Challenge Process had been conducted specifically to maximise value for stakeholders and that its plan offered approximately INR 3,400 crore higher gross value and INR 500 crore higher NPV than Adani’s proposal. It was contended that the CoC’s decision to approve Adani’s plan, which was below the liquidation value, was therefore contrary to the very objective for which the Challenge Process had been conducted.

It was submitted by the RP that the CIRP had been conducted in accordance with the CIRP Regulations and the RFRP, and that the RP had never intimated Vedanta that it had been declared as H1 bidder. It was submitted by the CoC and Adani that Vedanta had no vested right to have its plan approved merely because it had offered the highest NPV, and that each plan was required to be evaluated as a whole pursuant to the Evaluation Matrix.

The NCLAT held that there can be no dispute that maximisation of value is an objective of the IBC, however, the said objective has to be achieved in a time-bound manner with intent to resolve and revive the corporate debtor. The NCLAT further held that the Challenge Process merely identified the highest NPV proposal, which was only one of several factors to be considered by the CoC, and did not determine the successful resolution applicant. Consequently, it was held that Vedanta acquired no vested right of approval of its plan merely because it had emerged as the highest bidder on NPV basis.

The NCLAT noted that Adani had offered upfront cash recovery of INR 6,005 crore whereas Vedanta had offered INR 3,770 crore, and that Adani had provided for payment within two years whereas Vedanta’s payment extended up to five years. These were factors which had been taken note of by the CoC in taking its decision in commercial wisdom. Accordingly, it was held that the decision of the CoC not approving Vedanta’s resolution plan, despite its higher plan value and higher NPV, could not be said to be arbitrary or perverse.

Evaluation based on Evaluation Matrix

Vedanta contended that the resolution applicants were never informed that upfront payment would be the main yardstick for approval of the resolution plan and that scoring under the Evaluation Matrix could not be the sole consideration. It was submitted by the respondents that the Evaluation Matrix formed part of the RFRP, was known to all resolution applicants, and provided for evaluation on both quantitative and qualitative parameters. It was further submitted that Vedanta had not challenged the scoring of any resolution plan or contended that the Evaluation Matrix had been applied to suit any particular bidder.

The NCLAT observed that Regulation 39(3) of the CIRP Regulations obliges the CoC to evaluate resolution plans as per the evaluation matrix. The Evaluation Matrix was part of the RFRP and assigned equal weightage of 35 marks each to upfront cash recovery and NPV. While Vedanta scored the maximum marks on NPV, Adani scored substantially higher on upfront cash recovery. When the cumulative scores for upfront cash recovery and NPV were considered, Vedanta’s score was 53.51 whereas Adani’s score was 62.84. The total score of Vedanta was 75.60 whereas Adani’s total score was 89.76. The NCLAT therefore held that the evaluation of the resolution plans was done in accordance with the statutory obligation and the Evaluation Matrix, and that the CoC was not bound to approve a resolution plan merely because it had the highest NPV or the highest score in any single parameter.

Abdication of decision-making function by CoC

Vedanta contended that the CoC had abdicated its jurisdiction in favour of BDO and had relied only on the marks computed by BDO, without independently considering the resolution plans. The respondents submitted that BDO had been appointed only as a professional advisor for evaluating feasibility and viability of the plans, and that the ultimate decision remained that of the CoC.

The NCLAT rejected Vedanta’s contention and observed that BDO had merely been engaged to assist the CoC in evaluating feasibility and viability of the competing plans. The NCLAT further held that the submission that the CoC had abdicated its jurisdiction in favour of BDO was clearly belied by the minutes of the CoC meeting, where the report submitted by BDO was considered, queries were raised on the report, and BDO was asked to revisit the scoring of qualitative parameters. The NCLAT held that the report submitted by BDO was dealt with, considered and deliberated by the CoC, and that the decision was based on overall consideration of the respective resolution plans and taken in its commercial wisdom.

Addendum to Vedanta’s Resolution Plan

Vedanta had also submitted an addendum after the final resolution plans had been considered by the CoC and were to be put to vote. Vedanta contended that the addendum was merely clarificatory and did not alter the NPV of its resolution plan. The respondents, however, submitted that the addendum sought to materially modify Vedanta’s commercial proposal by increasing the upfront payment and equity/ quasi-equity infusion, both of which were relevant parameters under the Evaluation Matrix.

The NCLAT held that the addendum was not clarificatory in nature and had the effect of modifying the resolution plan submitted by Vedanta. It was observed that the addendum sought to alter key commercial parameters of the plan, including upfront cash recovery and equity infusion, and was intended to improve Vedanta’s score under the Evaluation Matrix. The NCLAT further held that permitting such unilateral modification after conclusion of the Challenge Process and submission of final resolution plans would compromise the fairness and finality of the resolution process.

The NCLAT observed that undoubtedly the resolution process, which is a process in rem, should reflect transparency and good faith. In the instant case, NCLAT was satisfied that the CIRP was conducted in a transparent manner giving opportunity to all resolution applicants to submit their best resolution plan as per the Evaluation Matrix which was part of the RFRP. Accordingly, the NCLAT held that the NCLT did not commit any error in rejecting Vedanta’s application and approving Adani’s resolution plan, and dismissed the appeal.

Concluding remarks

The NCLAT’s decision reaffirms the central role of the CoC in the insolvency resolution process and reinforces the limited scope of judicial review under the IBC. The judgment clarifies that value maximisation is not a mechanical exercise based solely on the highest bid or highest NPV, and that the CoC is entitled to evaluate each resolution plan as a whole, including the certainty of recovery, timing of payments, feasibility, viability and implementation prospects.

The decision also underscores the importance of finality in the resolution process and recognises that unilateral modifications after submission of final plans cannot ordinarily be permitted. While value maximisation remains an important objective of the IBC, judicial review remains confined to statutory compliance, procedural fairness and material irregularity, and does not extend to substituting the commercial wisdom of the CoC.

Please find attached a copy of the Judgment, here.