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Informist, Friday, Mar. 20, 2026

 

NEW DELHI – The National Company Law Appellate Tribunal Friday issued a notice to the monitoring committee of Jaiprakash Associates Ltd. on its creditor Velocity Enterprises Ltd.'s plea challenging the rejection of its work contract by the former's resolution professional and claims arising out of it. While approving Adani Enterprises Ltd.'s INR 145-billion resolution plan for the debt-ridden Jaiprakash Associates, the Allahabad bench of the National Company Law Tribunal Tuesday also rejected Velocity Enterprises' plea on cancellation of contract and subsequent claims.

 

The appellate tribunal said the matter needed consideration and asked Jaiprakash Associates to not invoke the bank guarantee submitted by Velocity Enterprises till it was hearing the latter's challenge. Further, the appellate tribunal directed Velocity Enterprises to extend the bank guarantee for some more time.

 

The case has its genesis in Jaiprakash Associates issuing a work order in 2022 in favour of Velocity Enterprises for execution of design, engineering, supply, erection and commissioning of electrical, mechanical and substation works of the pump house along with operation and maintenance. Thereafter, Velocity Enterprises had furnished an advance bank guarantee of INR 14.80 million in 2023, which was extended from time to time.  

 

In 2024, the tribunal had admitted ICICI Bank Ltd.'s insolvency petition against Jaiprakash Associates under the Insolvency and Bankruptcy Code for a debt of INR 12.69 billion. The order was upheld by the National Company Law Appellate Tribunal the same year.

 

Thereafter, Velocity Enterprises invoked arbitration due to dispute between parties and also filed claims of INR 25.57 million before the resolution professional of Jaiprakash Associates. However, the resolution professional terminated the work order given to Velocity Enterprises alleging breach relating to supply of transformers and stoppage of work, and rejected its claims as well. 

 

Velocity Enterprises said the actions taken by the resolution professional during Jaiprakash Associates' insolvency, including termination and steps towards invocation of the bank guarantee, were mala fide and prejudicial to the petitioner's right. Despite furnishing the requisite documents, the resolution professional rejected the claims without issuing any show cause notice or granting opportunity of hearing, said the petitioner.

 

When the case reached the Allahabad tribunal, it ruled that the disputes raised by the petitioner were essentially contractual in nature and cannot be adjudicated in summary proceedings under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Challenging the Allahabad tribunal order, Velocity Enterprises moved the appellate tribunal.

 

At 1242 IST, shares of Jaiprakash Associates were down 4.7% at INR 2.42 on the National Stock Exchange, while those of Adani Enterprises were up 0.3% at INR 1,942.60.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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