The Supreme Court on Friday dismissed Torrent Power, Jindal Power and Vantage Point Asset Management appeals, upholding Sarda Energy‘s Rs 1950 crore resolution plan for SKS Power. The apex court stated that the commercial wisdom of the lenders is paramount and the CoC’s primacy can not be substituted by judicial intervention.
The court said that since Sarda Energy’s resolution plan is approved by the NCLT and National Company Law Appellate Tribunal (NCLAT) and has been implemented, there is no scope for any interference, thus there is no merit in appeals.
“At its core lies the doctrine of commercial wisdom, a conscious legislative choice to wrest decisive authority. The IBC recognises that decisions on viability, valuation and acceptable haircuts are inherently commercial, not judicial codes.
Therefore, the courts do not substitute their assessment for that of the COC,” it said.
The adjudicating authority (NCLT) performs a supervisory role, ensuring statutory compliance and procedural fairness, but refrains from second-guessing economic bodies, the apex court said, in this case, the doctrine of commercial wisdom does embody both institutional discipline and legislative intent.
The Supreme Court noted that insolvency resolution must be efficient, market-responsive, and guided by those best placed to evaluate commercial work.
Respecting these limits will preserve the economic sense of the IBC and ensure that insolvency remains a predictable, time bound and market-driven process, it said.
The case dates back to October 1, 2024, when the NCLAT had upheld the approval given to Sarda Energy’s Rs 1,950 crore bid to acquire SKS Power Generation. The appellate tribunal had then rejected the objections raised by other contenders including Torrent Power, NTPC, Jindal Power and Vantage Point.
In April 2022, the Mumbai bench of the National Company Law Tribunal had admitted a petition by Bank of Baroda to initiate insolvency proceedings against SKS Power with a total admitted claims of Rs 2,560 crore. On August 13, 2024, the NCLT had approved Sarda Energy’s resolution plan, which covered nearly all dues owed to the financial creditors.
Sarda’s bid was voted by the CoC in favour of SKS Power, which has set up a 4X300 MW coal-based thermal power plant at Binjkote and Durramuda in Raigarh District, Chhattisgarh.
