The NCLT judge, however, differed with the contention of Dalmia Bharat, saying that shareholders with 98% stake were not outsiders.
The Kolkata bench of the 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 firm of Binani Cement, for a settlement outside the tribunal. While fixing the next hearing on April 2, the NCLT judge said that in the larger interest of the creditors, the CoC could give it consideration. The counsel appearing on behalf of Binani Industries told the bench that the company had now found the means to pay its creditors, mostly banks, within two weeks. Objecting to this, counsel appearing on behalf of Dalmia Bharat said Binani Industries was a third party, and not associated with the resolution process. The CoC counsel asked whether the ongoing resolution process once admitted could be halted, and if the same can be allowed under the Insolvency and Bankruptcy Code.
To this, Binani Industries said that the NCLT did have the inherent powers to consider its application, the logic of which was rejected by the counsel appearing on behalf of Dalmia Bharat. According to Dalmia Bharat’s advocate, such a move by the owners of the stressed company was “frivolous as they were not a part of the process”. The NCLT judge, however, differed with the contention of Dalmia Bharat, saying that shareholders with 98% stake were not outsiders. On March 19, Aditya Birla Group’s UltraTech Cement had announced that it has agreed to Binani Industries’ request to take over its subsidiary firm Binani Cement for Rs 7,266 crore. It had said that Binani Industries will use the proceeds to pay off the lenders. UltraTech had offered a letter of comfort to Binani Industries and said that its offer to buy Binani Cement is subject to the termination of the insolvency proceedings in the NCLT.
Subsequently, Binani Industries had moved the Kolkata bench of NCLT seeking termination of the insolvency proceedings. Prior to this, in its meeting held on March 16, the CoC had approved the plan presented by Dalmia Bharat for taking over Binani Cement. UltraTech had opposed it and also moved the NCLT alleging that there was lack of transparency on the part of the resolution professional to auction Binani Cement and it did not consider its revised offer which was higher than Dalmia Bharat’s. Dalmia Bharat has offered Rs 6,500 crore for Binani Cement. Binani Cement owes around Rs 7,000 crore to its creditors.