SC rejects HC order to defer KSK Mahanadi insolvency resolution proceedings
This story was originally published at 21:09 IST on 14 October 2024
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NEW DELHI – The Supreme Court Monday set aside a Telangana High Court order to defer the corporate insolvency resolution process of debt-ridden KSK Mahanadi Power Co. Ltd. before the National Company Law Appellate Tribunal. The move has put back on track the biggest bankruptcy resolution in the power sector involving Adani Power Ltd.'s INR 270 billion offer for the stressed KSK Mahanadi 1,800-megawatt project.
The high court had no jurisdiction to direct deferment of the corporate insolvency resolution process of KSK Mahanadi and also asking for consolidation of the insolvency proceedings of the company and its two subsidiaries -- KSK Water Infrastructure Pvt. Ltd. and Raigarh Champa Rail Infrastructure Pvt. Ltd., said the Bench led by Chief Justice of India D.Y. Chandrachud.
The top court said that it found merit in the appeal of the committee of creditors of KSK Mahanadi as the high court had passed the order without issuing notices to other parties. Earlier, Uttar Pradesh Power Corp. Ltd. had filed a petition in the high court seeking to club the resolution process of KSK Mahanadi and its two subsidiaries. The high court had asked Uttar Pradesh Power Corp. to file an application in the National Company Law Tribunal for clubbing the insolvency process.
Solicitor General Tushar Mehta, appearing for KSK Mahanadi, said that the insolvency process of KSK Mahanadi and Raigarh Champa Rail Infrastructure Pvt. Ltd. is at an advanced stage and there cannot be any consolidation at this stage. The high court's order has a grave impact on the resolution process of a corporate debtor with outstanding dues of INR 300 billion pending since 2019, said Mehta. "Any delay in resolution will lead to significant loss of public money to the CoC (committee of creditors) which consists of major financial institutions," he added.
The Uttar Pradesh Power Corp. had argued that the failure to consolidate the insolvency process of three companies would not be in the interest of creditors and other stakeholders. Adani Power's bid for the stressed KSK Mahanadi project was the highest. JSW Energy Ltd., NTPC Ltd., Vedanta Ltd., and Jindal Steel and Power Ltd. were the other bidders.
Today, shares of Adani Power ended 1.2% lower at INR 634.45 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Tanima Banerjee
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