NCLT bench asks Resolution Professional to continue managing Binani Cement

The Kolkata Bench of the National Company Law Tribunal (NCLT) on Friday passed an interim order asking the Resolution Professional (RP) of Binani Cement to continue taking care of the management of the company “until further orders’’.

The 270-day moratorium period for the insolvency resolution of Binani Cement ends on April 21. Under the Insolvency and Bankruptcy Code (IBC), if a resolution plan is not approved within this period, the company could go for liquidation. However, the tribunal has discretionary powers to extend the deadline or not consider the time taken for litigation within the stipulated period.

“The RP counsel brought to our notice that the 270-day period ends on April 21. Since the hearing could not be completed, the RP will continue management of the corporate debtor (Binani) until further orders,” Justice Jinan KR said.

The next hearing will be on April 23.

UltraTech Cement, the unsuccessful bidder for Binani, had on Thursday urged the NCLT to reject the offer made by Dalmia Bharat-controlled Rajputana Properties and accept its revised bid for the stressed Binani Cement. It had also suggested that the tribunal consider passing an interim order asking the lenders’ committee to reconsider the offers made by Dalmia and UltraTech.

Highest bidder challenged

UltraTech also questioned the evaluation criteria for selection of the highest bidder (H1) bidder. It also emphasised that its revised bid, which was higher by more than ₹1,000 crore as compared to Rajputana’s, should be considered since maximisation of the asset value was one of the key criteria for resolution under IBC.

In response to UltraTech’s submission, Dalmia Bharat’s counsel on Friday argued that the maximisation of value should happen in a ‘time-bound manner’; and since UltraTech submitted its revised bid on March 8, almost a week after Rajputana was declared the H1), its offer should not be considered.

Moreover, the Committee of Creditors’ (CoC) selection of the H1 was based on the guidelines laid down in the process document, which was ‘sacrosanct and binding’, the counsel argued.

Accepting UltraTech’s offer beyond the stipulated time period would set a ‘precedent’ and might prove to be detrimental to the timely closure of insolvency proceedings initiated against several other companies.

In response to this, the UltraTech counsel drew attention to the direction given by the Ahmedabad Bench of the NCLT asking the Resolution Professional and the CoC to re-examine the bids for Essar Steel India Ltd (ESIL).

Ultratech has most recently offered to pay ₹7,960 crore for Binani Cement, while Dalmia’s resolution plan, which was approved by the CoC at a meeting on March 14, offered ₹6,589 crore.

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