Torrent Power Seeks NCLAT Review of Sarda Energy’s SKS Power Bid

Torrent Power has escalated its legal battle to the National Company Law Appellate Tribunal (NCLAT) against the approval of Sarda Energy and Mining Limited’s (SEML) resolution plan for the financially troubled SKS Power Generation. The case stems from Torrent Power’s claims of unfair treatment in the resolution process after their bid, which allegedly offered the highest upfront payment, was rejected.

Torrent Power Challenges NCLT Decision

Torrent Power has contested the decision of the NCLT, which approved SEML’s bid for SKS Power Generation, a company that has been undergoing a Corporate Insolvency Resolution Process since April 2022. The insolvency process was initiated following a plea by Bank of Baroda, which had admitted claims totaling Rs. 2,560 crore. Torrent Power, along with other bidders like NTPC, Jindal Power, and Singapore-based Vantage Point Asset Management, was in the race to acquire SKS Power.

Torrent Power raised objections, claiming that the selection process was discriminatory and did not consider its bid, which included the highest upfront cash payment to creditors. The company argued that the Resolution Professional (RP) and the Committee of Creditors (CoC) deviated from the established process by allowing SEML to modify its resolution plan after submission. Torrent Power believes it was unfairly denied the opportunity to make similar revisions, thereby being placed at a disadvantage.

Torrent Power is challenging the decision made by the National Company Law Tribunal, claiming that their bid was more favorable and would have been more beneficial for all parties involved. They are seeking a review of the approval given to Sarda Energy and Mining’s resolution plan, arguing that it may not be in the best interest of SKS Power Generation or its creditors. The appeal filed with the National Company Law Appellate Tribunal signals Torrent Power’s determination to fight for their bid and potentially overturn the previous decision. This legal battle highlights the competitive nature of corporate insolvency proceedings and the importance of thorough evaluation and consideration of all bids before finalizing a resolution plan.

Allegations of Discrimination and Process Deviations

Torrent Power accused the Resolution Professional (RP) of favoring SEML by allegedly allowing the latter to modify its resolution plan after submission, without offering the same opportunity to other bidders. Torrent also sought access to the approved resolution plan, a request the NCLT denied, citing confidentiality concerns. Despite these objections, the Committee of Creditors ultimately voted in favor of SEML’s bid, which covers nearly all dues owed to the financial creditors.

Conclusion: The ongoing legal dispute highlights the complexities and challenges within the Corporate Insolvency Resolution Process. As Torrent Power’s appeal awaits hearing, the final outcome could have significant implications for future resolution processes.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.