The NCLAT has rejected Vedanta’s ₹17,926 crore resolution plan, affirming that the Committee of Creditors (CoC) may prioritize feasibility over the highest net present value. This decision underscores the CoC's authority in determining the most suitable resolution.
NCLAT Affirms CoC's Role in Determining Resolution Plans
The National Company Law Appellate Tribunal (NCLAT) has upheld the authority of the Committee of Creditors (CoC) by rejecting Vedanta’s resolution plan worth ₹17,926 crore, emphasizing the precedence of feasibility over mere financial valuation in the resolution process.
This ruling acknowledges the CoC's discretion to evaluate plans based not only on potential returns but also on the practicality and viability of proposed resolutions. The tribunal recognized that a higher net present value (NPV) does not automatically equate to a superior resolution plan.
“The feasibility of a plan is paramount in the resolution process, even over higher bids.”
Practitioners should observe this ruling as it reinforces the balanced approach required in assessing resolution plans, thereby guiding them in advising clients regarding the strategic formulation of bids and proposals in insolvency scenarios.
Citations
- NCLAT Order (2026)
