Supreme Court Revives Adani Power’s ₹27,000 Crore Bankruptcy Plan for KSK Mahanadi Project

The Supreme Court has reinstated the bankruptcy resolution for Adani Power’s ₹27,000 crore bid related to the KSK Mahanadi power project, which has a capacity of 1,800 MW. This decision overturns the Telangana High Court’s earlier ruling that paused the insolvency process for the financially troubled company.

Chief Justice DY Chandrachud, leading the bench, stated that the High Court did not have the authority to delay the corporate insolvency resolution process (CIRP) for KSK Mahanadi Power (KMP) or to merge the insolvency proceedings of KMP with its two subsidiaries, KSK Water Infrastructure (KWI) and Raigarh Champa Rail Infrastructure (RCRI).

The Supreme Court’s ruling came in response to an appeal from KMP’s Committee of Creditors, challenging the High Court’s September 10 decision, which was made without notifying other parties involved. The High Court’s order was based on a petition from the Uttar Pradesh Power Corporation (UPPC).

KMP provides water to UPPC through pipelines operated by KWI and transports coal via RCRI, which is also undergoing its own CIRP.

Adani Power’s ₹27,000 crore bid for KSK Mahanadi ensures a 92% recovery rate for its lenders. Solicitor General Tushar Mehta, representing KMP, argued that the CIRPs of KMP and RCRI are at advanced stages and should not be combined at this time. He warned that delaying the resolution could result in significant financial losses for the lenders, many of whom are major financial institutions.

Counsel Pallavi Pratap, representing UPPC, noted that the High Court had denied any relief to UPPC and instead directed it to seek a merger of the insolvency processes with the National Company Law Tribunal (NCLT).

KMP contended that the High Court’s order was made without proper consideration and violated the timely resolution principles outlined in the Insolvency and Bankruptcy Code (IBC). Besides Adani Power, other bidders for KMP included companies like Capri Global Holdings, Coal India, National Thermal Power Corporation, Vedanta, and JSW Energy.