NCLAT dismisses UPJVNL plea in Essar Power MP insolvency case

The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal filed by Uttar Pradesh Jal Vidyut Nigam Ltd (UPJVNL), bringing closure to a long-standing dispute over its claims in the corporate insolvency resolution process (CIRP) of Essar Power MP Ltd.

A Bench comprising Member Mohammad Faiz and Member Naresh Salecha upheld the Resolution Professional’s (RP) decision to admit UPJVNL’s claim at a notional value of Re 1. The RP had taken this view due to ongoing writ proceedings before the Allahabad High Court concerning the legitimacy of UPJVNL’s demand.

UPJVNL had argued that its invoices were fully supported by documents and should have been admitted in entirety. It contended that the RP had no authority to treat its dues as contingent, especially in the absence of any interim stay from the High Court. The state utility also claimed that the notional admission affected the Information Memorandum as well as the treatment of operational creditors under the approved resolution plan.

The appeal was opposed by Essar Power MP (now Mahan Energen) and the successful resolution applicant, Adani Power Ltd. They submitted that UPJVNL’s claim had been under challenge before the Allahabad High Court since 2015—well before the initiation of CIRP—and remained disputed. They argued that the RP’s role was limited to verification of claims and not adjudication, and that the notional admission was consistent with earlier NCLAT and Supreme Court rulings in the same insolvency matter.

The respondents also maintained that Essar Power MP draws water under Madhya Pradesh’s allocation from the Bansagar project, and that UPJVNL had no authority to levy water withdrawal charges. They further disputed claims relating to alleged loss of power generation in Uttar Pradesh.

Adani Power informed the tribunal that all CIRP-period dues claimed by UPJVNL had already been settled under protest, while pre-CIRP dues stood extinguished under the resolution plan, which has since been fully implemented. It added that even full admission of the disputed claim would not have altered payouts, as operational creditors received no distribution and the company’s liquidation value was zero.

The NCLAT, after considering the submissions, dismissed UPJVNL’s appeal and affirmed the RP’s decision.

Adani Power was represented by advocates Ruby Singh Ahuja, Vishal Gehrana, Aakriti Vohra, Shruti Pandey and Varsha Himatsingka from Karanjawala & Co, along with advocate Sandeep Singhi. The RP was represented by senior advocate Ritin Rai and advocate Pratiksha Mishra, while UPJVNL was represented by senior advocate Krishnendu Datta.

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