The Supreme Court on Thursday set aside a civil appeal by conglomerate Dalmia Bharat Ltd which had sought a stay on a National Company Law Appellate Tribunal (NCLAT) order that allowed bankrupt Binani Cement Ltd to consider a bid from UltraTech Cement Ltd.
Dismissing the appeal, the apex court said that it will not intervene "at this stage". The next hearing at NCLAT will take place on May 22.
On May 2, the Kolkata bench of National Company Law Tribunal (NCLT) had asked Binani Cement's committee of creditors (CoC) to consider a revised bid from UltraTech Cement.
Dalmia Bharat had objected to this order but did not managed to obtain a stay on it.
The NCLAT on May 4 allowed Binani Cement's CoC to approve either Dalmia Bharat or UltraTech's revised resolution plan.
On Tuesday, Dalmia Bharat moved the Supreme Court to ask for a stay on this NCLAT order.
On the same day, it also wrote to the resolution professional (RP) and CoC of Binani Cement alleging that the latter's parent Binani Industries Ltd and UltraTech are acting "in concert" for the sale of Binani Cement.
It said that UltraTech was ineligible to bid for a takeover of Binani Cement under Section 29A of the Insolvency and Bankruptcy Code as it was previously disqualified as a bidder.
The CoC of Binani Cement were scheduled to meet on Thursday to consider UltraTech's resolution plan, but called off the meeting following Dalmia Bharat's letter.
The story so far
Binani Cement has been undergoing insolvency proceedings initiated by NCLT since July last year. In February, UltraTech and a consortium of Dalmia Bharat and Bain-Piramal’s India Resurgence Fund had separately bid for the company.
In March, the Dalmia consortium emerged as the preferred bidder with an offer of Rs 6,300 crore, despite UltraTech’ revised bid of Rs 7,266 crore.
UltraTech was not declared the winner in view of the penalty imposed by the Competition Commission of India (CCI) for alleged cartelisation with 10 other cement manufacturers.
Later, UltraTech entered into an arrangement with the promoters of Binani Cement to provide Rs 7,266 crore ($1.1 billion) to help terminate the insolvency proceedings against the cement unit. It had also obtained CCI’s approval for its bid to acquire Binani Cement.
UltraTech’s significantly higher offer has, in recent weeks, forced some of Binani Cement’s creditors to backtrack on their earlier vote in favour of Dalmia Bharat’s resolution plan.
Dalmia Bharat had also challenged the arrangement between Binani and UltraTech, arguing that the lenders had approved its bankruptcy resolution plan and an agreement outside the NCLT would be illegal. The two companies have been in a deadlock for the takeover of Binani Cement ever since.
In April, UltraTech argued for a re-evaluation of its re-revised bid of Rs 7,966 crore by Binani Cement’s CoC. This was approved in NCLT’s abovementioned May 2 order. Dalmia Bharat says allowing UltraTech to take over Binani Cement would violate IBC and the entire proceedings under NCLT.