In a crucial move to streamline the biggest bankruptcy resolution in India's power sector, the Supreme Court on Monday overturned the Telangana High Court's order that had deferred the insolvency proceedings against KSK Mahanadi Power (KMP). This decision impacts Adani Power's Rs 27,000-crore bid for the 1,800-MW KSK Mahanadi project, which is under corporate insolvency resolution process (CIRP).
A Bench led by Chief Justice DY Chandrachud ruled that the Telangana HC lacked jurisdiction to halt the CIRP of KSK Mahanadi Power and its subsidiaries—KSK Water Infrastructure (KWI) and Raigarh Champa Rail Infrastructure (RCRI). The Supreme Court’s decision came in favor of the Committee of Creditors (CoC) of KMP, who argued that the HC’s order was issued without notifying the other involved parties. The HC ruling originated from a petition filed by the Uttar Pradesh Power Corporation (UPPC).
KMP, a public generating company, supplies water through pipelines managed by KWI and coal through RCRI, both of which are also undergoing insolvency processes. Adani Power's Rs 27,000-crore bid ensures a 92% recovery for the lenders involved in the insolvency proceedings of KMP's 1,800-MW plant.
Solicitor General Tushar Mehta, representing KMP, informed the SC that the CIRPs for both KMP and RCRI were at an advanced stage, arguing against the consolidation of the insolvency processes for the three companies. The HC’s order, if upheld, could have caused significant delays in the resolution of the Rs 30,000-crore debt, leading to substantial losses for the lenders, many of which are major financial institutions.
