Legal duel on, Binani set to miss deadline
Calcutta: The corporate insolvency resolution process initiated against bankrupt Binani Cement is set to miss the 270-day deadline stipulated under the Insolvency & Bankruptcy Code, 2016 as challenges thrown at the resolution plan from several quarters, including UltraTech Cement, continue to be heard by the Calcutta bench of the National Company Law Tribunal.
Judicial members of the bench fixed a hearing on Monday and suggested further audience in the days to come even as the deadline comes to an end on Saturday.
The members asked the resolution professional for Binani Cement to continue to manage the company and extended protection from creditors.
Though members did not clarify further, legal sources suggested that a company could go into liquidation if the committee of creditors (CoC) did not approve a resolution plan within the timeline.
"Since a plan has been approved and submitted before the NCLT for approval, the tribunal may take time to consider this. It would be interesting to see what happens if Rajputana's plan is rejected," a legal source explained.
During one of the longest hearing yet, senior counsel S.K. Kapur appearing for Rajputana Properties Pvt Ltd (RPPL) on Friday painstakingly defended its highest (H1) bidder status against the onslaught of former attorney-general Mukul Rohatgi, who spoke with gusto for UltraTech on Thursday.
According to Kapur, there was no provision under the corporate insolvency resolution process to set the clock back once a CoC-approved plan had been submitted before the tribunal.
"It can only be accepted or rejected," he said, countering UltraTech's proposal to have an open bidding in the courtroom.
Kapur also argued there was no provision to call the H2 bidder (second highest) for a discussion.
Rohatgi had suggested that the CoC may be asked to look at UltraTech's proposal, which is now proposing to pay Rs 1,020 crore more to all sections of creditors afresh.
Siddhartha Mitra, counsel for UltraTech, said on Friday that the CoC had enough time to consider his client's revised offer and brought to the tribunal's notice the order of Essar Steel where the CoC has been asked to look at the proposal afresh.
Rajputana, a consortium of Dalmia Bharat Cement, Bain Capital and Piramal Enterprise, proposed to pay Rs 6,589 crore.
Kapur pointed out that the demerit points were considered if there was any record of adverse regulatory order in the past five years and UltraTech had it.
He also argued there was no provision to call the H2 bidder for a discussion.
"H2 will only be called if the H1 bidder's plan is rejected," he said, placing great reliance on time bound completion of the due resolution process.