The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday reserved its order in the case of Binani Cement Ltd's insolvency proceedings after hearing all petitions, except that by the bankruptcy resolution professional alleging fraudulent transactions involving the promoters.
UltraTech Cement and Dalmia Bharat Cement have been in a deadlock for the takeover of Binani. In its plea, UltraTech Cement on Tuesday cited the "precedent" set in the bankruptcy resolution case of Bhushan Steel & Power Ltd when NCLT admitted UK's Liberty House bid after deadline. NCLT’s ruling on Monday gives Liberty House a chance to be in the race where Tata Steel was announced as the highest bidder. This, UltraTech Cement hopes, will make its case stronger. UltraTech lost out to Dalmia Bharat Cement in the race for Binani.
Dalmia Bharat's lawyer argued that Liberty House was not aware of the last date of submission of the resolution plan whereas in Binani's case, UltraTech was aware of the deadline. He also argued that no bidder had been declared as “H1” (highest bidder) in proceedings of Bhushan Steel, while the Dalmia consortium had already been named H1 by the committee of creditors in Binani's proceedings.
The 270-day time frame for approving a bankruptcy resolution plan for Binani Cement expired on April 21. However, the NCLT extended the time frame after deducting the period of litigation. NCLT also passed an interim order asking the resolution professional to continue managing Binani.
Binani has been undergoing insolvency proceedings initiated by NCLT since July 2017. In February, UltraTech and an equal joint venture between Dalmia Bharat and Bain-Piramal’s India Resurgence Fund had separately bid for Binani Cement.
The Dalmia consortium had emerged as the preferred bidder with a bid of Rs 6,300 crore, despite UltraTech raising its offer to Rs 7,266 crore. Subsequently, UltraTech entered into an out-of-court settlement with parent Binani Industries, which Dalmia Bharat has challenged.
Binani's operational creditors had moved the Supreme Court to obtain a stay on the Dalmia Bharat resolution plan and have asked for their claims to be settled on a par with those of financial creditors.
The lawyer for Dalmia on Tuesday said that 248 operational creditors would be fully paid; 24 would be paid 40% of their dues; while six are being paid 5% of their verified claims.
The lawyer for the income-tax department argued that it is the duty of the resolution professional to share all claims and dues before the committee of creditors. The lawyer recommended that the resolution plan be re-looked at by the committee, keeping in mind the amount due to the government.
Dalmia's lawyer said the company would settle a certain percentage of the total verified claims of the government.