The Supreme Court on Thursday ordered status quo as existing on September 6 before appellate tribunal NCLAT passed an order in a case related to the insolvency resolution process of Tamil Nadu-based Coastal Energen Private Limited (CEPL). The Chennai branch of the National Company Law Appellate Tribunal (NCLAT), on September 6, effectively put on hold the Rs 3,335 crore resolution plan of the consortium of companies — Dickey Alternative Investment Trust and Adani Power Ltd — for revival of the embattled firm CEPL.
The NCLAT had ordered that a status quo be maintained as on date in the insolvency resolution process of the ailing CEPL.
The NCLAT order had come on an appeal against an order of the National Company Law Tribunal (NCLT) which had approved the Rs 3,335 crore resolution plan of the consortium of companies for the CEPL.
The CEPL owned an imported coal-based thermal power plant at Tuticorin, Tamil Nadu and was facing insolvency proceedings.
The top court was hearing an appeal of the consortium of firms, the successful resolution applicant (SRA), against the September 6 order of the NCLAT.
A bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra disposed of the plea saying that the status quo, prevailing before the NCLAT order, be maintained.
Granting relief to the consortium which also included an Adani firm, the bench said the status quo order will be subject to the condition that the SRA will neither dismantle the CEPL plant nor create any third-party rights.
It also said the SRL will also not alienate the plant or create any financial obligations except in the ordinary course of business.
The CJI also said that no parties will seek any adjournments before the NCLAT which is going to hear the case against the NCLT order on September 18.
The top court said the order be not construed as any observation on the merits of the case.
Senior lawyers Mukul Rohatgi and Abhishek Singhvi appeared for the consortium of firms which are the SRA to revive the ailing CEPL.
The appeal before the NCLAT was filed by one Ahmed Buhari, a former director of CEPL. Solicitor General Tushar Mehta represented the Committee of Creditors (CoC).
As per the approved resolution plan, secured lenders of CEPL will get about Rs 3,330 crore, which is 28.52 per cent of the admitted claims of about Rs 11,677 crore.
The NCLT had admitted the CEPL’s corporate insolvency resolution process in February 2022 following a case filed by the State Bank of India, and appointed Radhakrishnan Dharmarajan as the resolution professional.
