New Delhi: On Monday, November 19, the Supreme Court during the hearing of a petition against a National Company Law Appellate Tribunal (NCLAT) order dismissed the plea filed by Dalmia Bharat’s Rajputana Properties in the case of bidding for acquiring of debt-ridden Binani Cement.
The petition was filed against the order NCLAT, which upheld the resolution plan of in favour of Ultratech to acquire debt-ridden Binani Cement. The matter was heard before a bench comprising Justices Rohinton Nariman and Navin Sinha, who upheld the decision of the Adjudicating Authority.
The Counsel on record for Dalmia Bharat’s Rajputana Properties, Advocates Gopal Sankaranarayanan and Neeraj Kaul, mentioned the matter last week before the Apex Court. Subsequently, the Chief Justice of India Ranjan Gogoi accepting the petition, listed the matter for hearing on November 19.
On November 14, a two-member bench of the NCLAT headed by Chairperson Justice SJ Mukhopadhaya rejecting the resolution plan submitted by Dalmia Bharat’s Rajputana Properties, ruled in favour of the Aditya Birla group firm, Ultratech to acquire Binani Cement by approving its revised bid for the acquisition.
The Dalmia resolution was disapproved on grounds of being “unbalanced”. The Tribunal observed that the plan discriminated between “equally situated” financial creditors and lacked to maintain a balance amongst other stakeholders such as the operational creditors of Binani Cement. Furthermore, the NCLAT remitted the records of the proceedings back to the NCLT Kolkata bench for establishing a monitoring committee for the process.
Previously on May 2, the NCLT Kolkata permitted the Resolution Professional and Committee of Creditors (CoC) of Binani to consider UltraTech's revised offer while granting Rajputana an opportunity to revise its resolution plan. However, disappointed with the NCLT decision, Rajputana Properties moved the Appellate Tribunal.
The Counsel on record appearing for Ultratech, comprised Senior Advocate Mukul Rohtagi and Advocate Mahesh Agarwal, who argued that the declaration of the Rajputana Properties as highest bidder had its discrepancies and was under challenge.
Previously, the Rajputana Properties bid was approved, however, following the revised offer by Ultratech, the decision was changed in favour of the latter.
During the final meeting on March 14, Ultratech had revised the offer which was well within the requisite time constraints. However, Dalmia Bharat claimed that Ultratech could not revise the offer.
The NCLAT had observed that the amended offer of UltraTech Cement has got 100 per cent voting from the Committee of Creditors and further stated that the intent of the Insolvency and Bankruptcy Code (IBC) was maximisation of the value of assets.
The operational creditors of Binani Cement, represented by Dhaval Vussonji, were in favour of the order being upheld as they believed that the corporate insolvency resolution process must maximise value for stake holders and there should not be any discrimination amongst creditors who are at least similarly placed.
In its extensive 44-page-long order, the NCLAT had observed that financial creditors including Edelweiss Asset Reconstruction Company, IDBI Bank, Bank of Baroda, Canara Bank, Bank of India and State Bank of India have been provided with 100 per cent of their verified claim. Whereas, the resolution applicant, Rajputana Properties quoted a lesser percentage to Export-Import Bank of India at the rate of 72.59 per cent and State Bank of India-Hong Kong at 10 per cent.
On the other hand, the resolution plan submitted by rival bidder, UltraTech allows maximization of assets of the Corporate Debtor, while some amount of working capital has been infused and all the financial creditors and the Operational Creditors have been paid 100 per cent of dues except the related parties, observed the NCLAT order.
Hence, the apex Court observed that the approval of Ultratech’s resolution plan by the Adjudicating Authority cannot be held to be illegal.