NCLAT upholds NCLT order approving Sarda Energy’s bid for SKS Power

Mumbai: The Delhi bench of the National Company Law Appellate Tribunal on Tuesday upheld the National Company Law Tribunal’s 13 August order approving Sarda Energy and Mining Ltd’s resolution plan for bankrupt SKS Power Generation (Chhattisgarh).

The NCLAT dismissed the plea filed by other resolution applicants Torrent Power, Jindal Power and Vantage Point Asset Management, challenging the NCLT-approved resolution plan. 

“We do not find that any sufficient grounds have been made out within IBC to interfere with the decision of the adjudicating authority (NCLT) approving the resolution plan of Sarda, in these appeals filed by unsuccessful resolution applicant. Accordingly, the appeals stand dismissed,” the bench led by justices Ashok Bhushan and Barun Mitra said.

In October 2023, following objections, the NCLT had directed lenders of SKS Power Generation to reconsider SEML’s resolution plan, which had been submitted by the resolution professional representing SKS Power. The plan faced subsequent challenges and was brought before the NCLAT. In May 2024, the appellate tribunal overturned the earlier NCLT decision, granting SEML the ability to seek final approval and instructing lenders to review the plan again. 

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On 13 August, the bench ruled in favour of Sarda Energy, rejecting the objections against the resolution plan. Dissatisfied with this ruling, the three applicants moved the NCLAT on 19 August, seeking relief.

The insolvency proceedings for SKS Power Generation began in April 2022 after lenders, including State Bank of India and Bank of Baroda, moved NCLT and filed claims amounting to ₹1,890 crore.

Akshat Khetan, founder of AU Corporate Advisory and Legal Services said “This case highlights the critical need for transparency and strict compliance with the IBC framework. The judiciary maintains a restrained approach, intervening only in instances of clear procedural lapses, while the focus remains on upholding the IBC’s goal of facilitating prompt resolutions and optimizing asset recovery.”

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