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Informist, Monday, Jan. 19, 2026

 

--NCLAT upholds Adani Power's INR-40-bln IBC plan for Vidarbha Industries 

--CONTEXT: NCLAT order on Vidarbha Ind operational creditor, employee pleas 

 

By Surya Tripathi

 

NEW DELHI – The National Company Law Appellate Tribunal has upheld the Mumbai bench of the National Company Law Tribunal's order to approve Adani Power Ltd.'s INR-40-billion resolution plan for debt-ridden Vidarbha Industries Power Ltd. The appellate tribunal rejected the pleas of Vidarbha Industries' operational creditor, Western Coalfields Ltd., and employee Pradeep Sot, challenging Adani Power's resolution plan.

 

"... we are of the view that the pay-outs to the operational creditor, including the employees, cannot be said to be violating the provisions of Section 30(2)(b) of the IBC (Insolvency and Bankruptcy Code, 2016). Appellants have not been able to prove any other violation in the approval of the resolution plan," the appellate tribunal said.

 

Operational creditors are statutorily entitled to receive the amount as provided under Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, the appellate tribunal said. In the event of liquidation of the corporate debtor under Section 53, where the liquidation value of the operational creditors, including employees, being zero, no amount was mandated under the law, the appellate tribunal said. The payment of INR 10 million to the operational creditors, thus, cannot be said to be in any manner in breach of the provisions of Sections 30(2)(b) of the IBC, it added.

 

As per the Mumbai tribunal's order, the employees are entitled to provident fund and gratuity dues, which are required to be paid in full, subject to the INR 10 million outer limit earmarked by Adani Power in the resolution plan, the appellate tribunal said. Thus, the employees' entitlement to receive full provident fund and gratuity is fully protected by this clause, it said. 

 

The resolution professional had admitted Western Coalfields' dues of INR 5.02 billion. Western Coalfields said that approval of Adani Power's resolution plan was not in accordance with the provisions of the 2016 Code. The committee of creditors of Vidarbha Industries has approved the resolution plan after expiry of 180 days without seeking any extension from the adjudicating authority. The appellate tribunal rejected Western Coalfield's argument and said that the resolution plan was approved within the given timeline.

 

Sot said that the payment to financial creditors under the resolution plan was about 60% of the total admitted claims, whereas the total payout to operational creditors, including employees, was only INR 10 million, which was negligible without any intelligible rationale. This provision of the resolution plan is contrary to the scheme of the 2016 Code and defeats the statutory authorisation provided by law, said Sot. 

 

In June, the Mumbai tribunal had approved Adani Power's resolution plan for Vidarbha Industries. Under the resolution plan, Adani Power will pay INR 2.93 billion as the cost of the corporate insolvency resolution process. Further, the successful resolution applicant will give INR 37.06 billion to secured creditors against an admitted claim of INR 62.00 billion. Operational creditors will receive INR 10 million under the resolution plan.

 

Originally, Axis Bank and State Bank of India had filed insolvency petitions against Vidarbha Industries Power in 2020 and 2022, respectively. Subsequently, the original lenders assigned their debts to CFM Asset Reconstruction Pvt. Ltd., after which the latter became the petitioner in the insolvency case. In 2024, the Mumbai tribunal admitted CFM Asset Reconstruction's petition to initiate insolvency proceedings against Vidarbha Industries. The company has admitted dues of INR 67.54 billion.  

 

Vidarbha Industries has a 600 MW domestic coal-fired power plant in Butibori, Nagpur district, Maharashtra.

 

Friday, shares of Adani Power ended 1.5% lower at INR 140.56 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

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