NCLAT allows Sarda Energy to seek tribunal nod for its SKS Power offer
The National Company Law Appellate Tribunal (NCLAT) has granted permission to Sarda Energy & Minerals (SEML) to pursue a final approval from the bankruptcy court for its bid for SKS Power Generation. This decision overturns the lower court's ruling in October, which instructed the committee of creditors (CoC) to review its selection of SEML as the recipient of the 600 MW power producer.
The National Company Law Appellate () has allowed & Minerals (SEML) to seek a final clearance from the for its offer for , setting aside the lower court's order in October that had asked the () to reconsider its decision to award the 600 MW power producer to .In a 51-page order, a two-judge bench comprising NCLAT chairman Ashok Bhushan and Arun Baroka, directed the () to revive SEML's petition seeking approval for the deal within 60 days. The bench also kept the door open for competing bidders and Vantage Point Asset Management to file fresh appeals if they have new grounds for any challenge.
"We have noticed that no opportunity was given to the successful resolution applicant (SEML), and CoC ... to obviate the delay in disposal of the matter," the appellate tribunal said. It gave two weeks to SEML, resolution professional (RP) and the CoC to file their reply and other materials before the NCLT.
The appellate tribunal's order is a relief to SEML, though it still requires NCLT's approval.
"RP Ashish Rathi has already filed an application in the NCLT seeking revival of the plea seeking plan approval. It will most likely be taken up post the summer break (of the NCLT) next month," said a person aware of the process. "It remains to be seen whether the challengers (Torrent Power and Vantage Point) file new objections to this plea," he added.
Rathi did not reply to an email seeking comment.
The NCLAT's order was in response to a plea by SEML, challenging NCLT's direction to the CoC in October to reconsider their decision.
At the time, the NCLT had said that the decision of the CoC was based on incomplete financial data, leaving the decision-making process "perverse and amenable to interference."
The NCLAT, for its decision, relied on a Supreme Court order in another case that had said a minor infraction of procedure, or any other similar reasons, was not sufficient to term a decision as perverse. "In event, all relevant materials are available before the CoC, which is deliberated, no perversity can be imputed in the decision," the NCLAT said.
Nagpur-based SEML was declared the winning bidder in June last year, over Torrent, Vantage and Jindal Power in a close fight with less than one percentage point difference between the offers of the top four bidders. SKS owes ₹1,890 crore to Bank of Baroda and State Bank of India. The facility is in high demand because it is a rare working power plant available for sale with 25 years of fuel agreement accompanying a railway line.
Jindal also had filed a late application seeking certain reliefs from the NCLAT, but the court refused to grant any relief. The importance of the case can be gauged from the battery of heavyweight lawyers representing different parties in the case: Harish Salve (for SEML), Mukul Rohatgi (CoC), Kapil Sibal (Torrent) and K Venugopal (Jindal Power).
Source: Stocks-Markets-Economic Times
