The Supreme Court has agreed to examine an appeal by Videocon founder Venugopal Dhoot challenging an appellate tribunal order that mandated separate insolvency resolution proceedings for two group entities, Videocon Industries Ltd. and Videocon Oil Ventures Ltd.
A two-judge bench comprising Justices P S Narasimha and Alok Aradhe issued a notice on Dhoot’s petition on Tuesday and scheduled the matter for a detailed hearing on August 10.
Appellate Tribunal Order Challenged
Dhoot’s petition contests a May 14 order by the National Company Law Appellate Tribunal (NCLAT), which had overturned a previous ruling by the National Company Law Tribunal (NCLT) that directed the merger of the insolvency cases of both Videocon entities.
Setting aside the merger, the appellate tribunal had observed that Videocon Industries Ltd. (VIL) and Videocon Oil Ventures Ltd. (VOVL) operate in entirely different sectors—consumer electronics and oil exploration, respectively—making it impractical for a single entity to possess the requisite operational expertise to revive both companies.
The NCLAT ruled that the decision to run independent Corporate Insolvency Resolution Processes (CIRPs) fell within the commercial wisdom of the Committee of Creditors (CoC), which judicial bodies should not override. It further noted that maintaining the corporate debtor as a going concern alongside resolving creditor dues remains the primary objective of the Insolvency and Bankruptcy Code (IBC).
Current Status of Group Entities
The insolvency process for VIL remains ongoing, whereas VOVL has already been acquired by Bharat PetroResources Limited (BPRL), a state-owned subsidiary of Bharat Petroleum. BPRL exercised its Right of First Refusal to complete the acquisition, which received NCLT approval in June 2024.
Earlier in the resolution process, Twin Star Technologies, promoted by Vedanta Group chairman Anil Agarwal, submitted a resolution plan for VIL on December 11, 2020. The plan received approval from both the CoC and the NCLT the following July. However, Dhoot appealed the approval before the NCLAT, arguing that foreign oil and gas assets were improperly excluded from the resolution scope.
Dismissing Dhoot’s appeal, the NCLAT criticized his position as contradictory and marked by frequent changes in stance. The tribunal noted that in 2016 and 2017, Dhoot himself had sought to separate VIL’s liabilities to ring-fence foreign energy assets from domestic financial problems.
Background of Debt Structure and Legal Disputes
The financial exposure originates in 2012, when VIL and VOVL secured credit facilities on an obligor/co-obligor arrangement from a banking consortium led by the State Bank of India (SBI). In 2016-17, Dhoot, serving as Group Chairman and Managing Director, asked SBI to convert VIL’s status from a co-obligor to a corporate guarantor. The restructuring was intended to keep the primary liability off VIL’s balance sheet and insulate foreign oil and gas holdings from domestic operations.
The Mumbai bench of the NCLT admitted an SBI application under Section 7 of the IBC on June 6, 2018, initiating a CIRP against VIL. A separate CIRP was subsequently launched against VOVL on November 8, 2019. Following these developments, Dhoot petitioned the NCLT to consolidate VOVL’s insolvency process with VIL and 12 other group companies. He also submitted a withdrawal proposal under Section 12A of the IBC, which lenders rejected with a 98.14 percent majority vote.
On February 12, 2020, the NCLT initially accepted Dhoot’s plea and directed the resolution professional to consolidate all assets, property rights, and claims of VOVL and overseas units—including Videocon Hydrocarbon Holdings, Videocon Energy Brasil, and Videocon Indonesia Nunkan Inc.—into VIL’s insolvency estate.
Creditors including SBI, BPRL Ventures Indonesia, and Pertamina Hulu Energi Nunukan Company challenged the NCLT’s consolidation order before the NCLAT. The appellate tribunal stayed the merger directive on February 19, 2020, before officially setting it aside in its May 14 ruling.
