Coastal Energen Acquisition: Adani Power Led Consortium To Continue Operating Tamil Nadu Plant

The Supreme Court on Thursday set aside the National Company Law Appellate Tribunal order that temporarily halted Adani Power Ltd.-led consortium's resolution plan for debt-ridden Coastal Energen Pvt.

As a result, the consortium will continue its operations at the 1,200 MW plant situated in Thoothukudi, Tamil Nadu.

The court said that the NCLAT order suffered from inconsistencies and has directed that the appellate tribunal hear the case for final disposal on Sept. 18. The counsels appearing for the parties will not seek any adjournments when the case comes up for hearing, the court also said.

The court has clarified that the consortium will not dismantle the plan, nor create any third party rights.

It was further clarified that the court was not commenting on the merits of the case as of now and that no equities shall be claimed by way of the court's order.

In August, the National Company Law Tribunal gave a go-ahead to an Adani Power-led consortium’s resolution plan for the debt-ridden Coastal Energen. This meant that the consortium’s plan for Coastal Energen’s project in Thoothukudi stood approved.

In a judgment running into 132 pages, the NCLT, after due consideration, approved the consortium’s Rs 3,333-crore plan.

While approving the resolution plan, the tribunal observed that the available jurisprudence in the IBC space has adequately established that adjudicating authorities only have limited powers of judicial review. This is because they cannot substitute their opinion with that of creditors' commercial wisdom.

However, on the first day of the appeal hearing, the National Company Law Appellate Tribunal granted status quo ante on the approved resolution plan, causing the plan to suffer a setback. The NCLAT's interim order temporarily halted the acquisition process, relinquishing the project's operations from the Adani Power led consortium to the erstwhile resolution professional.

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