NCLAT upholds resolution plan of Adani Power for Vidarbha Industries

NCLAT upholds Adani Power's ₹4,000 crore resolution plan for Vidarbha Industries Power, rejecting challenges on CIRP timeline and operational creditor payouts under the IBC

The National Company Law Appellate Tribunal on Friday dismissed appeals filed by Western Coalfields Ltd and an employee representative challenging the approval of Adani Power Ltd’s resolution plan for Vidarbha Industries Power Ltd, holding that the plan was approved within the statutory timeline and complies with the Insolvency and Bankruptcy Code(IBC).

 

A bench of Chairperson Justice Ashok Bhushan Member (Technical) Barun Mitra upheld the June 18, 2025 order of the National Company Law Tribunal, Mumbai Bench, which had cleared Adani Power’s ₹4,000-crore resolution plan for the insolvent power producer.

 

Western Coalfields, an operational creditor with admitted claims of about ₹502.58 crore, had argued that the resolution plan was unlawfully approved after the expiry of the 180-day corporate insolvency resolution process (CIRP) period under Section 12 of the IBC.

 

The tribunal, however, rejected this contention, noting that the committee of creditors (CoC) had approved the final resolution plan in February 2025, well before the 180-day deadline that ended on March 28, 2025.

 

The NCLAT also rejected objections to a subsequent modification made by Adani Power on April 1, 2025, which extinguished residual operational debt instead of converting it into equity.

 

The tribunal held that the change was permitted under a clause in the approved plan allowing alterations to the acquisition structure, provided stakeholder payouts remained unchanged.

 

In a separate appeal, an employee representative challenged the allocation of only ₹1 crore to operational creditors, including employees, against admitted operational claims exceeding ₹550 crore.

 

The tribunal ruled that the distribution did not violate Section 30(2)(b) of the IBC, noting that the liquidation value of operational creditors was nil, as the liquidation value of the company was insufficient even to meet secured financial creditors’ claims.

 

The bench relied on the Supreme Court’s ruling in Essar Steel, reiterating that financial and operational creditors need not be treated identically and that differential payouts are permissible under the IBC.

 

Importantly, the tribunal clarified that statutory dues such as provident fund and gratuity are required to be paid in full and cannot be capped by the ₹1-crore allocation to operational creditors, as already directed by the NCLT.

 

Finding no violation of the IBC or procedural irregularity, the NCLAT dismissed both appeals and upheld the resolution plan in entirety.

 

Adani Power Limited was represented by S&A Law Offices.