Binani Industries (BIL) on Wednesday moved the National Company Law Appellate Tribunal (NCLAT) offering to clear 100% of the claims of all creditors within two weeks if its subsidiary Binani Cement was brought out of the purview of the insolvency process.
While scheduling a hearing on May 22, the appellate tribunal observed it would consider whether “the National Company Law Tribunal (NCLT) can refuse the offer of the shareholders of the corporate debtor if he intends to pay 100% of credit amount of creditors within two to four weeks”. If Binani Cement is allowed to exit the corporate insolvency resolution process by paying its dues, it would be a first for cases under the Insolvency and Bankruptcy Code (IBC). BIL holds a 98.4% stake in the near-bankrupt Binani Cement.
The NCLAT bench on Wednesday also asked the committee of creditors (CoC) and the resolution professional to file their replies within five days. It also directed Rajputana Properties, a subsidiary of the Dalmia Bharat Group, whose bid for Binani Cement had been earlier approved by the CoC, to file an intervention application to be heard in the matter.
This is the second time BIL is attempting to bring Binani Cement out of the purview of the IBC. The company had in April moved the Supreme Court (SC) asking for Binani Cement to be withdrawn from the resolution process, but the apex court had expressed its unhappiness at this. The SC noted the IBC process should not be bypassed as the matter was already being heard by the NCLT. Subsequently, Binani Industries withdrew its plea and the matter moved back to the NCLT.
What had prompted BIL to approach the SC was an offer made to it by the Aditya Birla Group-promoted UltraTech Cement to buy a 98.43% stake in Binani Cement for Rs 7,266 crore, provided the resolution process under the IBC was terminated.
In subsequent hearings, the NCLT allowed a revised bid by UltraTech to be considered by the CoC and also offered Rajputana Properties, which had earlier been selected as the H1 bidder by the CoC, a chance to better its offer of Rs 6,930 crore. A meeting of the CoC has been scheduled for Friday, when it will study the revised bids. The resolution professional has been directed by the NCLAT to only offer its comments on the bids; it has directed and not to declare the outcome and submit it to it in a sealed envelope.
The IBC, under Section 29 (A), prohibits wilful defaulting promoters from participating in the resolution process. Senior advocate UK Choudhary said there was nothing in the law to prohibit a promoter from settling his dues in their entirety and asking for the company to be brought out of the insolvency proceedings even if the CoC has zeroed in on the highest bidder.