For many homebuyers, the Jaypee story has stretched across more than a decade. Bookings were made and transactions completed, but construction was halted midway. That stalled reality is what eventually pushed Jayprakash Associates Ltd (JAL), the flagship company of the Jaypee Group, into insolvency in June 2024 after defaulting on loans, triggering proceedings under the Insolvency and Bankruptcy Code (IBC).
On Monday, the National Company Law Appellate Tribunal (NCLAT) dismissed Vedanta Ltd’s challenge to the approval of Adani Enterprises’ resolution plan, settling a key contest in the Jaypee insolvency.
A bench of Chairperson Ashok Bhushan and Member (Technical) Barun Mitra, in its 96-page order, held that “no grounds have been made out… to interfere with the decision of the Adjudicating Authority”, and concluded that “there is no merit in the appeal”. Here’s what to know about the dispute and the insolvency process.
How the insolvency process played out
JAL entered insolvency in June 2024 after defaulting on loans exceeding Rs. 57,000 crore. Once admitted into the Corporate Insolvency Resolution Process (CIRP), which is primarily done to maximise the debtor’s assets while ensuring that the company functions as a going concern to protect the interests of the stakeholders, control shifted to a resolution professional, and lenders then formed what is called a Committee of Creditors (CoC).
A resolution professional takes control of the assets and oversees the process in a transparent manner, whereas the CoC is an IBC-governed body that is central to the CIRP because its members bear the primary economic consequences of the company’s failure. The law empowers them with “commercial wisdom” to make sound decisions about the viability of resolution plans and acceptable cuts on debt.
The first step involved inviting expressions of interest, which is the first step in identifying candidates who meet the criteria to take over as the corporate debtor (CD). By early 2025, multiple bidders had been shortlisted, and a request for resolution plan (RFRP) was issued, setting out the rules on how bids would be submitted, how they would be evaluated and the criteria that would be applied.
Initial plans were considered inadequate. In response, the CoC triggered a “Challenge Process”, which is a structured bidding round meant to push the bidders to improve their offers. By September 2025, Vedanta had emerged with the highest net present value, around Rs 12505 crore.
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Bidders were then required to submit final, detailed resolution plans after the challenge process. These plans were to then be evaluated as a whole. Final plans were submitted in October 2025, and in November, the lenders evaluated them using a pre-defined framework and put them to a vote. Adani’s plan secured an overwhelming majority and was eventually approved.
The dispute
In November, a day after the lenders decided to begin voting, Vedanta sent an addendum to its already submitted plan. It significantly increased its upfront cash component and proposed additional equity infusion.
Vedanta argued that the lenders should have considered it in the interest of maximising value. It contended that “the Addendum clearly was towards maximization of the value of the assets of the CD and CoC could have very well in accordance with the provisions of the RFRP taken into consideration the Addendum for evaluation of the Resolution Plan of the Appellant… The consideration of Addendum and the value offered by the Appellant was in the interest of all stakeholders. The decision taken by the CoC in Resolution Process had to be reasonable, transparent and in the interest of all stakeholders of the CD.”
The CoC refused to accept the addendum, saying that the final plan had already been submitted in October and that any change after that stage, especially after voting had been scheduled, would violate the process rules. It said: “The Appellant is unsuccessful Resolution Applicant, who cannot be allowed to reopen the Process, which stand concluded by the CoC in its commercial wisdom. The Appellant has no vested right to have its Resolution Plan approved because it offered the highest net present value…..While the Appellant emerged as highest NPV, but when assessed purely on the basis of total amount offered on an NPV basis, the Resolution Plan submitted by Respondent No.3 [Adani Enterprises] offered substantially higher consideration on an upfront basis.”
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The NCLAT agreed with this position. It held that the addendum was not a clarification but a modification of the financial proposal, and the process governing the bidding did not permit such changes at that stage. “The Process Note clearly prohibited any change or modification of the financial proposal of the Resolution Applicant which have become final in the Challenge Process. The modification which was sought to be introduced by the Addendum by the Appellant cannot be said a clarification rather it substantially sought to improve the scoring of the Appellant with respect to upfront payment and equity infusion,” it held.
Why Vedanta lost the bid
Even without the addendum, Vedanta argued that its original plan was superior, offering higher value and net present value than Adani’s.
The tribunal assessed this and held that while value maximisation is an objective of the insolvency law, it is not the only consideration. It noted that the objective must be achieved within a time-bound process. It said, “There can be no dispute to the proposition that maximisation of the assets of the Corporate Debtor is an objective of the CIRP but said objective has to be achieved in a time bound manner with intent to resolve and revive the Corporate Debtor.”
The lenders used an “evaluation matrix” to assess bids. This framework looked at multiple factors, including upfront cash recovery, the timing of payments, capital infusion, feasibility of the business plan, and the bidder’s ability to execute it.
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When the plans were assessed, Adani’s proposal performed better overall. While Vedanta scored strongly on net present value, it lagged on upfront cash, which lenders treated as important because it determines immediate recovery.
The tribunal concluded that lenders are not bound to select the highest bid or even the highest-scoring plan. They are required to follow the process and evaluate plans within the framework that they have set. “[The] mere fact that an Applicant has scored highest in the Evaluation Matrix or highest in NPV is no obligation on the CoC to approve any such Plan.” Instead, the CoC’s decision must be based on an overall consideration of the respective Resolution Plans taken in its “commercial wisdom”.
The role of commercial wisdom
At the centre of the ruling is the principle of commercial wisdom.
The law vests in CoC the authority to decide which plan is viable. Courts do not decide which bid is better; they only check whether the process followed the law. This restraint is built into the IBC itself.
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Judicial review is confined to compliance under Section 30(2) and 61(3), that is, intervention is possible only when there is “material irregularity” in how the process was conducted. In fact, the tribunal found none, saying that there was no material irregularity in conducting the resolution process.
