The battle for Jaypee Group's flagship company, Jaypee Associates Ltd. (JAL), has now reached the Supreme Court, with Vedanta challenging the Committee of Creditors' (CoC) decision to back Adani Group's resolution plan — despite Vedanta's higher headline bid. But experts say the bigger concern is what the litigation signals for India's insolvency framework. At the heart of the dispute lies a familiar Insolvency and Bankruptcy Code (IBC) tension of headline value versus realisable value.
While Vedanta's bid offered a larger total figure, Adani's proposal scored on higher upfront cash and a faster payout timeline — factors that lenders prioritised. “The commercial wisdom of the CoC will always prevail,” said Sanjay Asher, Senior Partner at Crawford Bayley, adding that creditors are best placed to evaluate which bid maximises value. Courts, he noted, have consistently refrained from interfering unless there is clear evidence of mala fide intent.
Echoing this, Abizer Diwanji, Founder of Neostrat Advisors LLP, stressed that headline numbers can be misleading. “What matters is net present value and the probability of recovery,” he said, pointing out that deferred payments introduce credit risk, making execution capability a key differentiator. He added that resolution under the IBC is broader than recovery, encompassing business continuity, employment, and long-term value creation.
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Market veteran Deven Choksey highlighted the strategic fit of JAL's assets within Adani Group's ecosystem, from cement and power to logistics and land bank. This complementarity, he said, likely strengthened the group's case in the eyes of lenders, even if it involved upfront haircuts.
From a lender's perspective, the evaluation goes beyond price discovery. “Net present value and the bidder's ability to execute are critical,” said former banker and consultant Naresh Malhotra. With repayments often staggered, credibility and financial strength weigh heavily in decision-making.
However, legal experts caution that prolonged litigation could undermine the very objective of the Insolvency and Bankruptcy Code. Senior Lawyer at the Supreme Court, Swapnil Kothari, noted that the Supreme Court is unlikely to intervene unless there is a glaring legal error, emphasising that speed is central to the resolution process. “A faster resolution can often outweigh a higher but delayed payout,” he said.
The broader consensus seems to be that frequent legal challenges risk eroding asset value and delaying recoveries. Diwanji put it bluntly — “people should stop litigating and accept outcomes” — arguing that overreach by stakeholders, including courts and bidders, can dilute the effectiveness of the IBC.
Watch the full discussion here:
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