The NCLAT approved Adani Power’s offer for Korba West Power and directed Shapoorji Pallonji & Co to pursue disputes through arbitration

The appellate panel was hearing a plea submitted by Shapoorji Pallonji & Co, challenging a judgment issued by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) on June 24, 2019, sanctioning Adani Power’s resolution plan.

The National Company Law Appellate Tribunal (NCLAT) has upheld Adani Power’s bid for Korba West Power’s 2019 Resolution Plan and directed Shapoorji Pallonji & Co to continue arbitration procedures for the remaining claims. “There is no illegality in the order of the Adjudicating Authority’s (NCLT) approval of the resolution plan, and it does not see any reason to set aside the resolution plan by Adani Power,” a two-member NCLAT bench stated.

The appellate panel was hearing a plea submitted by Shapoorji Pallonji & Co, challenging a judgment issued by the Ahmedabad Bench of the National Company Law Tribunal (NCLT) on June 24, 2019, sanctioning Adani Power’s resolution plan.

Shapoorji Pallonji & Co had claims for Rs 45.22 crore, and arbitration was underway.

Korba West Power, on the other hand, has initiated the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code.

After this, the corporation was placed under moratorium, and the aforementioned arbitration procedures were halted. During the CIRP, Shapoorji Pallonji & Co claimed the sum as an operating creditor.

RP testified before the NCLAT that the appellant’s claim was denied only after a thorough investigation. It went on to say that Shapoorji Pallonji & Co’s claim is the subject of a dispute and is awaiting resolution in an arbitration.

In response to Shapoorji Pallonji & Co’s assertion that no written notice of its rejection was provided, RP stated that it is obligated to provide Notice to the ‘Operational Creditors’ only if the aggregate dues are greater than 10% of the ‘debt’ of the ‘Corporate Debtor’.

In this example, the total amount of the ‘Operational Debt’ was just 6% of the acknowledged ‘Claims’ of the ‘Corporate Debtor’.

Adani Power stated that CIRP was conducted fairly and that its resolution plan was supported by a 69 percent majority.

The NCLAT further stated that it is undisputed that the RP did not transmit the rejection of the claims to Shapoorji Pallonji & Co in writing.

“For all the foregoing reasons, we are of the considered view that there is no illegality in the Order of the ‘Approval of the Resolution Plan’ by the NCLT and we do not see any reason to set aside the Resolution Plan per se except for observing that the RP ought not to have made a ‘Contingent Provision’ with respect to the Appellant herein having regard to the specific facts of this case, which would be subject to the result of the Arbitration Proceedings,” said NCLAT.