Supreme Court Orders Status Quo on Coastal Energen Insolvency Case

The Supreme Court has ordered the maintenance of the status quo as of September 6 in the insolvency case of Coastal Energen Private Limited (CEPL). The decision affects a Rs 3,335 crore resolution plan by Dickey Alternative Investment Trust and Adani Power Ltd. The case now returns to NCLAT for further hearings.

In a significant development, the Supreme Court on Thursday mandated the preservation of the status quo as it existed on September 6 in the ongoing insolvency resolution proceedings of Coastal Energen Private Limited (CEPL), based in Tamil Nadu.

This order comes in response to an appeal by the consortium of companies—Dickey Alternative Investment Trust and Adani Power Ltd—against the National Company Law Appellate Tribunal's (NCLAT) decision to stay a Rs 3,335 crore resolution plan aimed at reviving CEPL. CEPL, which operates an imported coal-based thermal power plant in Tuticorin, Tamil Nadu, has been entangled in insolvency proceedings since February 2022.

The Supreme Court bench, including Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra, emphasized that while the status quo will be maintained, the CEPL plant must not be dismantled, nor any third-party rights created until further hearings at NCLAT. The NCLT had previously approved the resolution plan, promising secured lenders Rs 3,330 crore or 28.52% of their admitted claims. The matter is scheduled for a hearing at NCLAT on September 18.

(With inputs from agencies.)