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The Kolkata bench of National Company Law Tribunal (NCLT) on Tuesday asked the Committee of Creditors (CoC) whether it could consider the application filed by Binani Industries, the parent company of stressed Binani Cement, for a settlement outside the tribunal.
Binani Industries, which recently entered into an in-principle understanding with UltraTech, offered to pay-off all the dues to its creditors within two weeks and pleaded for termination of insolvency proceedings in the Kolkata bench of NCLT.
As per the understanding, UltraTech would acquire 98.47 per cent stake of Binani Industries in the cement unit for ₹7,266 crore subject to ‘termination of insolvency proceedings’. The funds can then be used to pay off Binani Cement’s creditors, including the unsecured ones.
The CoC, had in its meeting on March 14, approved Dalmia Bharat’s wholly-owned subsidiary Rajputana Properties’ bid, which offered to pay around ₹6,350 crore for Binani Cement.
Appropriate consideration
Justice Jinan KR of the Kolkata bench of NCLT felt that the application filed by Binani Industries was in the ‘larger interest of all creditors’.
“We are not giving any directions, we are only asking the CoC to take this up for appropriate consideration at their liberty,” the judge said. The matter will be heard again on April 2. However, Dalmia Bharat counsel S K Kapoor argued that Binani Industries was a ‘third party’, since it had not been a part of the resolution process.
According to the CoC counsels, there was no provision in the insolvency and bankruptcy code (IBC) to suspend a resolution process after it has started.
“If the procedure laid down by the statute has to be followed then this application (of Binani Industries) cannot be entertained,” they argued.
To this, the counsel for Binani Industries said that NCLT did have the ‘inherent powers’, to consider its application.
While the IBC has no provision to suspend a resolution process after it has been admitted by NCLT, however, a precedent to this was set by the Supreme Court last year, when it had allowed settlement between parties even after initiation of insolvency proceedings.
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