Torrent Power moves NCLAT against Sarda Energy's bid approval for SKS Power

Torrent power has moved the appellate tribunal NCLAT against the approval of Sarda Energy and Mining's resolution plan for the debt-ridden SKS Power Generation.

Earlier on August 13, the Mumbai-based bench of the National Company Law Tribunal (NCLT), while approving Sarda Energy and Mining's (SEML) bid, had rejected applications, including of Torrent Power, to acquire SKS Power Generation (Chhattisgarh).

Torrent Power had raised objections over the selection process, terming it to be discriminatory, and contended that it has proposed the highest upfront payment. The Torrent group firm also sought a copy of the approved plan, which was rejected by the NCLT.

 

The order has now been challenged by Torrent Power before the Delhi-based bench of the National Company Law Appellate Tribunal (NCLAT).

Torrent Power's petition is scheduled for hearing on Tuesday before a three-member bench of the NCLAT headed by its Chairperson Justice Ashok Bhushan.

Corporate Insolvency Resolution Process (CIRP) was started against SKS Power Generation in April 2022 over the plea of Bank of Baroda, which had a total admitted claims of Rs 2,560 crore.

Along with Torrent Power, several other companies like NTPC, Jindal Power, and Singapore-based Vantage Point Asset Management were in the race. However, SEML's resolution plan was voted by the Committee of Creditors (CoC) in favour of SKS Power Generation.

According to media reports, SEML's bid of over Rs 2,000 crore covers nearly all dues owed to the financial creditors.

Torrent Power approached the NCLT after the Resolution Professional of SKS Power Generation filed a petition to seek the insolvency tribunal's approval for the SEML's bid.

The Ahmedabad-based company contended before the NCLT that it had submitted the highest upfront cash payment to the creditors of SKS Power Generation after incorporating the observations of the RP and lenders.

The Torrent group firm argued that owing to its highest proposed upfront payment, it ought to have been declared as the successful bidder and not "the Respondent No 2 (SEML) which, per its contentions, had lower qualitative and quantitative credentials".

It also alleged that the RP has deviated from the terms of RFRP (Request for Resolution Plan) and the Process Note by allegedly giving additional opportunities to SEML to further improve its resolution plan by allowing modifications in its key commercial terms, the 124-page-long NCLT order mentioned.

Torrent Power also alleged it to be "discriminatory" as it was done without providing similar opportunities to other resolution applicants.

The Torrent group firm had requested the NCLT to direct the RP of SKS Power to serve a complete copy of the Plan Approval Application.

It had also asked to defer the pronouncement of orders in the Plan Approval Application filed by RP until the adjudication and disposal of its present plea.

Torrent Power's plea was opposed by Resolution Professional and SEML before the NCLT. The lenders submitted that it has deliberated extensively on the feasibility and viability of the resolution plans submitted by all the resolution applicants, including Torrent Power and has accordingly voted upon SEML.

Moreover, NCLT also declined Torrent Power's plea to hand over a copy of the approved plan citing a judgement from the Supreme Court, which said the Resolution Plan furnished by one or the other Resolution Applicant is a confidential one and it cannot be disclosed to any Competing Resolution Applicant.

"We are thus not inclined to approve the instant application viz... and the same deserves to be dismissed," the NCLT had said.

SKS Power Generation has set up a coal-based Thermal Power Plant at Binjkote and Durramuda in Raigarh District, Chhattisgarh. The thermal power project consists of 4X300 MW capacity power generating units.

To date, Phase I of 2X300 MW capacity has been completed and the company is currently in the midst of commencing execution of Phase II 2X300 MW capacity, according to the information available on its website.