Binani insolvency: UltraTech cites order on Bhushan, Dalmia rebuts plea

The second-highest (H2) bidder for Binani Cement, UltraTech Cement, appealed on Tuesday to the authorities concerned for reconsidering its enhanced bid for the bankrupt firm, citing the order of the National Company Law Tribunal (NCLT) Delhi in the Bhushan Power and Steel case.

The NCLT on Monday allowed Liberty House to bid for Bhushan Power and Steel though the last date for bidding had elapsed. This came after the hearing on Binani Cement ended on Tuesday.

Dalmia Bharat, the top bidder for Binani Cement, said the two cases were different and the NCLT Delhi’s order had no bearing on the matter.

Referring to the order, Siddhartha Mitra, legal counsel representing UltraTech Cement in the Kolkata Bench of the NCLT, said according to the order, an applicant could submit a resolution plan 30 days before the stipulated date under the Insolvency and Bankruptcy Code (IBC) passed and the internal process documents were not binding in regard to the bidding process.

He alleged the Committee of Creditors (CoC) as well as the resolution professional (RP) for Bhushan Power and Steel hadn’t allowed Liberty House’s bid, and this was similar to UltraTech’s case.

The Aditya Birla Group firm’s counsel said UltraTech Cement had first given its plan on February 22 and revised its offer to beat the one of Dalmia Bharat on March 8, which was within the stipulated 270-day period before Binani Cement went for liquidation. 

UltraTech Cement has challenged the selection process of the H1 bidder and said it was ranked lower than Dalmia Bharat on the account of flawed selection criteria, though it increased its bid to more than Rs 79 billion, which was enough to repay all creditors.

According to the income tax department’s legal counsel, under the plan made by the CoC, government bodies and agencies are being paid just over 18 per cent of their claim of Rs 1.14 billion while under the rejected plan of UltraTech Cement all dues could be cleared.

Dalmia Bharat’s contention is that unlike the Bhushan Power and Steel case, the CoC of Binani Cement had chosen the H1 bidder, and unlike Liberty House, UltraTech Cement had access to the process documents, which outlined the selection criteria.  “The last date of submission of the resolution plan was not conveyed to Liberty House, whereas UltraTech (Cement) was aware of the last date,” S K Kapoor, legal counsel of Dalmia Bharat, told the tribunal.