The NCLAT on Tuesday has ruled that the resolution professional (RP) of Binani Cement cannot decide on eligibility condition of the bidders placing their revised bids and instead directed the potentially bankrupt company’s Committee of Creditors (CoC) to select and approve one of the bids placed before it. In turn, it cleared the last hurdle, which has been holding back the crucial CoC meeting where UltraTech’s revised offer of Rs 79.60 billion will be up for discussion.
The NCLAT bench headed by Justice S J Mukhopadhyaya directed that the RP need to submit the resolution plans in a sealed cover to the CoC and hand over his comments only on questions pertaining to conformity with the IBC.
After the Kolkata bench of NCLT, in its order directed the CoC to consider UltraTech’s offer, while reconsidering the offer from the Dalmia Bharat led consortium only of it raises the bid to match UltraTech’s, the latter had moved the Appellate Tribunal to stall the CoC meeting from taking place.
After it failed to obtain a stay in NCLAT, Rajputana Properties — the Dalmia Bharat led conglomerate, had moved the Supreme Court where the apex court also didn’t interfere in the scheduled CoC meeting. Afterwards, it wrote to the RP and the CoC alleging that UltraTech is ineligible to bid as per Section 29 (A) of IBC. This section deals with various clauses making a bidder ineligible to place any bids.
Acting upon the allegation, the RP had cancelled the CoC meeting which he himself had scheduled on May 10 to probe the accusation. Sources suggested that it left UltraTech with the only option to obtain a direction from NCLAT so that its offer can be placed for discussion among Binani Cement’s lenders.
Sources close to UltraTech suggested that NCLAT’s decision implies that the RP can only provide his advisory and comments on UltraTech’s bid but cannot take a call on eligibility criteria. Instead, decisions related to eligibility as well as acceptance of bids now rest solely with the CoC. However, the decision of the CoC will depend on the outcome of NCLAT’s decision.
Sources in Binani Cement, as well as its creditors, said that a CoC meeting has been scheduled on Friday this week and the agenda of the meeting is likely to be finalised soon following NCLAT’s directive.
Previously, the operational creditors have questioned the RP’s intention to cancel the CoC meeting after scheduling the same on the eve of getting a letter from Dalmia Bharat and had opined that the RP should have approached NCLT or NCLAT over the letter in question but need not have stalled the meeting.