In their defence against accusations of not being fair in evaluating the bid of UltraTech Cement despite it being better, both Dalmia Cement (Bharat) and the committee of creditors (CoC) for Binani Cement on Tuesday argued that there was no provision in the Insolvency and Bankruptcy Code, 2016 (IBC), which allows negotiations with the H2 (second-ranked) bidder.
The Aditya Birla Group cement firm had submitted two resolution plans which both didn’t conform to the process laid down, they argued before the Kolkata bench of the National Company Law Tribunal (NCLT). While SK Kapoor, the counsel for Dalmia Bharat, argued that UltraTech flouted the provisions of the IBC by submitting two resolution plans, one in February and another in March, Pratap Chatterjee, counsel for the CoC, argued that only the H1 bidder can be contacted for negotiations.
He said the IBC doesn’t have a guideline in case of negotiating with bidders. “Whereever there are gaps, common law will come. So, CoC went by the guidelines of the Central Vigilance Commission. CoC has to go for a time-bound solution of the problem with value maximisation. It can’t consider an offer beyond time. There has to be certainty of law,” Chatterjee said.
Exim Bank had on Monday accused the resolution professional (RP) of “dereliction” of his duties since he allegedly didn’t ask the insolvent firm’s CoC to consider the revised bid of the Aditya Birla Group-led firm under the corporate insolvency resolution process.
The division bench, comprising justices Jinan KR and Madan Balachandra Gosavi, wanted to know from the resolution professional’s counsel as to why, despite Exim Bank’s request, Vijaykumar V Iyer, the RP, did not take up the matter in the CoC meet for discussion on March 14. It was at this meeting of the CoC that the Rs 6,600-crore resolution plan of Dalmia Bharat-controlled Rajputana Properties was approved. Echoing Chatterjee, Kapoor in his submission said bids should be negotiated with the H1 bidder only and all the lenders consistently wanted to negotiate with the H1 bidder.
Even Exim, which is also a member of the CoC, voted for Dalmia’s plan and had been consistently agreeing to the hair cut of Rs 170 crore, which is 28% of its total claim, he said. It has also written a letter to Rajuptana Properties in this regard. Ultratech Cement, in a plea before the NCLT’s Kolkata bench, had said CoC ought to have considered its revised resolution plan and approved its bid as H1. The revised bid, which was submitted to Iyer on March 8, was not considered by the CoC in its March 14 meeting.
By: Indronil Roychowdhury & Mithun Dasgupta