NCLAT reserves order in Jaypee insolvency case; Vedanta alleges flawed evaluation, Adani defends bidding process

In his counter argument on Tuesday, senior counsel Abhijeet Sinha appearing for Vedanta Group, argued that the entire resolution process was vitiated by serious lapses, including lack of transparency, non-consideration of material aspects, and absence of a fair evaluation framework.

Sinha submitted that Vedanta's resolution plan was never properly evaluated at any stage, with key elements of its proposal allegedly ignored.

"The process fails the test of a fair and value-maximising mechanism under the Insolvency and Bankruptcy Code," Sinha argued, adding that commercial wisdom of the Committee of Creditors (CoC) cannot be used as a shield to justify arbitrary decision-making.

He further argued that the evaluation matrix, which was intended to be the primary tool for assessing bids under the process documents, was neither properly applied nor consistently followed. According to him, deviations were introduced without disclosure or justification, undermining the credibility of the process.

Sinha also pointed to the minutes of CoC meetings, claiming that only limited time was spent on crucial aspects of Vedanta's plan, raising doubts over whether any real evaluation took place. "Scoring is not equal to consideration," he argued, questioning the absence of any data-backed analysis or reasoned decision-making.

He alleged that the process lacked consistency, objectivity, and equitable treatment of bidders.

Challenging the reliance on discretionary and confidentiality clauses, Sinha argued that such provisions cannot override the requirement of a transparent and legally fair process. "Non-disclosure cannot be equated with non-evaluation," he submitted, adding that these clauses cannot be invoked to avoid scrutiny by court.

He further contended that the process was reduced to a mechanical comparison of isolated financial components, with undue emphasis on upfront payment. According to him, this distorted the evaluation framework, as upfront payment is only one part of a financial proposal and cannot determine the overall value of a resolution plan.

Sinha also argued that the challenge mechanism failed in its purpose, as bidders were not given a fair opportunity to improve or match competing offers. He described the case as an exceptional instance where a resolution applicant is not challenging the outcome itself, but seeking enforcement of the declared process.

He added that despite repeated references to "value maximisation," there was no material on record demonstrating how this principle was actually applied across multiple bidding rounds. "Not one document shows conscious evaluation," rather decision was taken in the name of Commercial Wisdom of COC he emphasised.

Opposing the submissions of Vedanta, senior advocate Arun Katpalia, appearing for the Resolution Professional of Jaiprakash Associates Limited, defended the process, stating that it was conducted strictly in accordance with the approved framework and involved structured negotiations.

He argued that bidders were given adequate opportunities to enhance their offers and that the final outcome reflected the highest and best value discovered through competitive bidding. Katpalia also maintained that there was no obligation to disclose internal deliberations of the CoC beyond what is required.

Senior advocate Ritin Rai, appearing for the Adani Group, who were declared winners, argued that the reserve price of around Rs 12,000 crore was only a benchmark and that bids crossing this level reflected substantial value enhancement due to competitive dynamics.

Rai added that enterprise values in earlier stages were significantly lower, and the eventual increase in bids demonstrated the effectiveness of the challenge process in maximising value.

After hearing all parties, the appellate tribunal reserved its judgment and directed the parties to submit written arguments over next two to three days. (ANI)