The Supreme Court on Thursday allowed Dicky Trust-Adani Power to operate bankrupt Coastal Energen Pvt until the National Company Law Appellate Tribunal (NCLAT) passes a final order.
The Dicky Trust-Adani Power consortium is the successful bidder for the bankrupt firm. The NCLAT, by its order of September 6, had halted the Rs 3,335 crore resolution plan put forth by the consortium for the revival of Coastal Energen Private Limited.
The appellate tribunal had ordered that the resolution professional would continue to run Coastal Energen’s power plant in Thoothukudi, Tamil Nadu, until September 18, the next date of hearing.
Any money generated during this period would be kept in an escrow account, it had held.
Terming the NCLAT’s interim order as ‘inconsistent’, the apex court said that on one hand, the NCLAT directed that for a period of one week, the resolution professional would continue to operate the plant as before, and on the other hand, it directed that the status quo as on the date will be maintained.
“The first part of the above direction seems to indicate that the status quo ante would have to be restored, while the second part of the above direction seems to indicate that the status quo as on that day (namely September 6) will be maintained,” the court said.
Chief Justice of India (CJI) DY Chandrachud said, “Since proceedings are listed before the NCLAT on September 18… and both sides state that no adjournments will be sought and if NCLAT prepones it will not object.” So parties shall cooperate with NCLAT when the next hearing is held, the court said.
Senior advocate Mukul Rohatgi, appearing for the consortium, said the committee of creditors had approved their resolution plan with a 97 per cent vote in November 2023, and it was approved by the National Company Law Tribunal on August 30, 2024. He told the court that on August 31, Rs 3,335 crore was paid to 16 borrowers and possession of the plant was taken. The appeal before the NCLAT was filed by Ahmed Buhari, a former director of Coastal Energen, on September 3.
After the order was pronounced, Rohatgi had requested that the appeal be transferred to the NCLAT Principal Bench to be heard by Justice Ashok Bhushan. However, the court refused this plea, saying that it would send a wrong signal.
Meanwhile, senior advocate Kapil Sibal, appearing for the respondents, said Adani Power, in its independent capacity, had sent an email for an Expression of Interest, but it was rejected by the committee of creditors. However, Adani came back as part of the consortium and such “backdoor entry” cannot be allowed, he said.
In response, the CJI said, “They paid Rs 3,300 crore to the committee of creditors. The committee of creditors have approved the plan with 97 per cent. Their commercial wisdom ought to prevail.”
Coastal Energen was admitted to the insolvency process by the NCLT based on an application filed by the State Bank of India in February 2022.
First Published: Sep 12 2024 | 7:10 PM IST
