The NCLAT challenge to Adani Enterprises’ approved resolution plan for Jaiprakash Associates reveals how competing bidders assess Committee of Creditors decision-making processes. Vedanta Group has contested the November 2025 approval of Adani’s ₹14,535 crore bid, arguing procedural irregularities in the creditor voting mechanism that selected the successful resolution plan.
The Committee of Creditors approved Adani’s proposal over Vedanta’s competing offer through the established voting framework under the Insolvency and Bankruptcy Code. Both bidders submitted resolution plans during the Corporate Insolvency Resolution Process, with lenders evaluating proposals based on recovery value, implementation feasibility, and operational restructuring plans. The creditor committee’s decision followed months of due diligence and stakeholder consultations.
Vedanta’s NCLAT petition challenges the procedural aspects of the approval process rather than disputing the commercial terms of competing bids. The challenge centres on whether the Committee of Creditors followed prescribed evaluation criteria and voting procedures when selecting between resolution plans. This procedural focus indicates potential gaps in how creditor committees document their decision-making rationale and comparative assessment methodology.
The underlying tension involves competing interpretations of ‘maximising value for stakeholders’ under insolvency law. Different bidders present varying combinations of upfront payments, operational commitments, and employment retention plans. Creditor committees must weigh immediate recovery against long-term operational viability, often without standardised evaluation matrices. The NCLAT will examine whether the creditor committee applied consistent criteria across all resolution plan evaluations.
Jaiprakash Associates’ insolvency case involved multiple lenders and complex asset valuations across real estate, infrastructure, and cement operations. The Committee of Creditors included both financial creditors and operational creditors with different recovery priorities and risk assessments. When creditor committees comprise diverse stakeholder groups, voting dynamics can reflect varying interpretations of optimal resolution strategies rather than uniform commercial logic.
The challenge exposes how resolution plan approvals rely heavily on creditor committee discretion without detailed regulatory guidance on comparative evaluation standards. The IBC framework provides voting thresholds and procedural requirements but limited specificity on how committees should assess competing proposals that meet minimum eligibility criteria. This regulatory gap becomes apparent when unsuccessful bidders contest approval decisions in appellate forums.
Corporate boards of companies undergoing insolvency proceedings face governance challenges when multiple resolution plans emerge. Directors must balance fiduciary duties to shareholders with statutory obligations under insolvency law, while resolution applicants conduct due diligence on existing management decisions and operational performance. The board’s role shifts from strategic decision-making to information provision and compliance with resolution plan requirements.
The NCLAT’s decision will establish precedent for how appellate courts review Committee of Creditors’ commercial judgments. Current jurisprudence provides limited guidance on grounds for challenging resolution plan approvals beyond procedural violations or eligibility failures. If courts begin scrutinising creditor committees’ comparative assessment methodology, future resolution processes may require more detailed documentation of evaluation criteria and decision-making rationale.
My Boardroom Takeaway
Directors serving on boards of financially distressed companies should expect increased scrutiny of creditor committee decision-making processes. Board committees may wish to establish clearer documentation standards for resolution plan evaluations, particularly when multiple eligible bidders participate. Audit committees should consider reviewing whether management information systems can support detailed comparative analyses that creditor committees may require to defend approval decisions in appellate proceedings.