Finality without findings: The missing layers in Vedanta-Adani’s JAL resolution

In the recent National Company Law Appellate Tribunal (NCLAT) judgment regarding the Jai Prakash Associates Ltd (JAL) resolution, the Insolvency and Bankruptcy Code (IBC) is tested with the nuanced legal clash between Adani and Vedanta.

The judgment in the JAL resolution is not just a commercial dispute. It is a stress test of whether India's insolvency law can survive its own doctrine. 

Vedanta offered ₹17,926 crore in gross plan value and recorded the higher NPV of ₹12,505.85 crore in the challenge process. Adani’s approved plan totals ₹14,535 crore. The Committee of Creditors (CoC) voted 93.81% for Adani. The NCLAT upheld it. JAL’s liquidation value is ₹15,799 crore; Adani’s plan is ₹1,264 crores below that figure. As the Supreme Court held in Maharashtra Seamless Ltd. v. Padmanabhan Venkatesh (2020), a plan below liquidation value is not per se impermissible provided it falls within CoC commercial wisdom. The legal significance of that gap lies not in its existence, but in whether it triggers class-specific obligations under Section 30(2)(b), which the analysis below examines.

The NCLAT’s core holding is legally sound and unassailable on appeal. Process Note Clauses 13.9, 13.19 and 14.2(xv) categorically prohibited any upward or downward revision post-challenge process. The decisive evidence came from Vedanta itself: its NCLT rejoinder (paras 67–68) conceded the addendum would make it “the highest scorer not just on NPV but on the aggregate evaluation matrix as well.” A document cannot simultaneously be a ‘clarification’ and also a ‘score-transforming’ intervention. Ajay Gupta v. Pramod Kumar Sharma, (2022), where changing a 180-day payment term to 90 days was held substantive, is correctly applied. Regulation 39(1A) independently bars a second modification where a challenge process has already been used.

Paragraph 8 records the Solicitor General appearing for the CoC stating, “it appears that there was some leakage of information to Vedanta.” “It appears” is speculative; no proof, attribution, or prejudice was established on record and material irregularity under Section 61(3)(ii) requires demonstrable impact on outcome. What the statement nonetheless created was an obligation on the NCLAT to make a reasoned finding, on whether the equal-opportunity standard of Clause 11.4E of the request for resolution plan (RFRP) had been maintained. Proceeding without that finding is a gap in the judgment, not a proven breach.

IDRCL, the operational arm of the government-promoted NARCL, which is set up under Finance Ministry direction, was a CoC member in JAL’s CIRP. There is no statutory bar on government-backed ARCs being legitimate CoC members. The institutional concern is narrower.

In the 23rd CoC meeting (judgment para 25), after BDO presented evaluation scores, IDRCL suggested qualitative parameters had ‘scope for improvement.’ BDO left the meeting, reconsidered, returne, and revised, with no resolution applicant present and no documented change to the approved evaluation parameters. Regulation 2(ha) of the CIRP Regulations defines ‘evaluation matrix’ as parameters ‘approved by the committee.’ The judgment does not record any CoC resolution formally approving revised parameters before the relook was commissioned. Whether the mid-session oral instruction constituted a methodology change within the approved framework, or a departure from it, is a question Section 61(3) review should have examined. The NCLAT does not.

In the 24th CoC meeting (para 57), IDRCL led the addendum rejection which the CoC unanimously followed. The Solicitor General simultaneously defended that decision as CoC counsel. The concurrent alignment raises a transparency question which IBBI’s disclosure framework does not address. This is a reform concern, not a finding of legal error.

The evaluation matrix (Annexure I, judgment para 22) allocated 35 marks to upfront cash recovery and 35 to NPV. Courts do not redesign ex-ante frameworks accepted by all bidders. What courts can examine under Section 61(3) is whether the design is arbitrary or structurally irrational.

The rationality question this matrix raises is this: NPV already applies a tiered discount rate of 11–20% per annum to all deferred payments (Annexure I), meaning time-staggered cash flows are already penalised within the NPV calculation. Assigning 35 independent marks to upfront cash as a separate parameter then penalises the same timing dimension a second time, which is clearly outside the NPV formula.

The result is that a bidder whose plan is adjudged more valuable on a risk-adjusted present-value basis (Vedanta, 35/35 on NPV) can still lose to a bidder with lower NPV but higher immediate cash, because the matrix structurally double-discounts payment timing. Whether this crosses from permissible creditor preference into arbitrary methodology, a test different from economic optimality, was a Section 61(3) question the NCLAT did not examine. The combined scores on these parameters are Adani - 62.84, Vedanta - 53.51.

Vedanta’s counsel argued expressly (judgment para 12) that Adani’s plan (₹14,535 crore) is below JAL’s liquidation value (₹15,799 crore) while its own plan exceeded it. This was framed as a gross aggregate comparison. As Maharashtra Seamlessconfirms, that framing cannot succeed: CoC commercial wisdom extends to approving a plan below liquidation value. The aggregate comparison is not the Section 30(2)(b) test.

Section 30(2)(b) asks a class-specific question: do operational creditors receive at least their Section 53 liquidation equivalent? Under the 2019 amendment, homebuyers receive equivalent protection. Financial creditors have no such floor. The NCLT approval order (endorsed at NCLAT paras 90–91) records only: “Resolution Plan is in accordance with Sections 30 and 31.”

Without the Section 53 liquidation waterfall data before the NCLT, one cannot assert as a finding that operational creditors or homebuyers received less. What one can assert as a standard: a generic compliance recital does not discharge class-specific Section 30(2)(b) scrutiny for any below liquidation value plan. To force that review, Vedanta needed waterfall data and a targeted submission. The gross-value framing allowed the tribunal to treat the question as commercial wisdom. The Section 30(2)(b) argument was legally available. It was never made in the form that could have succeeded.

The NCLAT applies Torrent Power Ltd. v. Ashish Arjunkumar Rathi (2026) for process finality and commercial wisdom primacy, not exclusively promoter-abuse and that application is doctrinally permissible. But Torrent Power’s caution was developed for concluded processes without process integrity concerns. Where the CoC’s own counsel raises information leakage and scores are revised mid-meeting, the finality rationale is contested. K Sashidhar and Essar Steel preserved limited review space where the CoC has not ‘taken into account’ statutory compliance. Torrent Power does not extinguish that space.

Section 61(3) permits appeal on ‘material irregularity in the exercise of powers.’ Three grounds warranted examination and received none as follows:

1. Whether the undocumented mid-session BDO revision deviated from Regulation 2(ha)?

2. Whether the SG’s leakage statement required a factual finding on equal opportunity under RFRP Clause 11.4E? and

3. Whether the NCLT’s generic Section 30(2)(b) recital satisfied the limited review preserved by Essar Steel?

None of these substitute economic judgment for CoC discretion. All three are justiciable within the NCLAT’s Section 61(3) jurisdiction.

• IBBI must prescribe documented approval protocols for any mid-session evaluation score revision. An oral CoC instruction to ‘relook’ without a recorded parameter change is incompatible with Regulation 2(ha)’s definition of evaluation matrix.

• Government-promoted CoC members (IDRCL, NARCL equivalents) should be subject to mandatory disclosure protocols where the approved resolution applicant has governmental or policy alignment not because participation is illegal, but because transparency demands it.

• Section 30(2)(b) compliance in below liquidation-value plans must be demonstrated by class-specific analysis in NCLT approval orders, not discharged by a generic compliance recital. This is a judicially enforceable standard.

• IBBI should address structural double-discounting in evaluation matrix design: weighting immediate payment separately from NPV may fail an arbitrariness test under Section 61(3) even where it clears the commercial wisdom threshold.

• The Supreme Court should clarify that Torrent Power’s process-finality caution does not apply where process integrity concerns, including acknowledged leakage, remain factually unresolved.

The NCLAT judgment is legally defensible. But defensibility is not completeness. A score revision without recorded methodology, a leakage allegation left unresolved, a Section 30(2)(b) challenge that was legally available but procedurally forfeit and a double-discounting question - courts cannot resolve after the fact where none of these challenge commercial wisdom. All are questions where Section 61(3) jurisdiction exists to answer. When the doctrine that protects the process also insulates its omissions, IBC’s second decade has work to do.

Prasanth Raju is an advocate practicing before the Bombay High Court.