The NCLAT has upheld the Committee of Creditors' (CoC) discretion to favor a feasible resolution plan over a higher net present value (NPV) offer, rejecting Vedanta’s ₹17,926 crore proposal. This reinforces the CoC's commercial wisdom in deciding on plans during insolvency.
NCLAT Affirms CoC’s Discretion in Resolution Plan Selection
The National Company Law Appellate Tribunal (NCLAT) has delivered a crucial verdict affirming the authority of the Committee of Creditors (CoC) to prioritize a feasible resolution plan over merely a higher net present value (NPV) offer. In a recent case concerning Vedanta's resolution proposal worth ₹17,926 crore, the NCLAT validated the CoC's decision-making process.
The tribunal noted that the CoC's commercial wisdom is paramount when it comes to selecting resolution plans, and such discretion should not be overturned lightly. The NCLAT's ruling clarifies that the CoC may favor plans that demonstrate practical viability and suitability for the company’s circumstances, even if they may offer lower immediate returns.
This decision represents a significant affirmation of the CoC's overarching role in insolvency proceedings and sends a clear message regarding the value of sustainable resolutions over financial offers alone. Practitioners should be aware that the assessment of resolution plans will consider various factors beyond just financial metrics, including operational feasibility.
As this trend continues, practitioners may need to adopt a more holistic approach when preparing resolution plans, ensuring they align with the CoC's requirements and priorities.
Citations
- Vedanta Case (2026) NCLAT
