Insolvency: NCLT verdict on UltraTech Cement proposal likely by July 10

However, SC's approval needed for takeover

The Kolkata bench of the National Company Law Tribunal (NCLT) is expected to pass its verdict on UltraTech Cement’s plan before July 10 for acquiring the stressed assets of Binani Cement just before the “daily hearing in this case” commences at the National Company Law Appellate Tribunal (NCLAT).

The NCLT, however, refused Dalmia Bharat’s plea on taking a look at the resolution plan of UltraTech, which has been submitted for the tribunal’s approval. During a hearing on the status update in the case, a two-member bench comprising Jinan KR and Madan Gosavi, members – judicial, at the Kolkata bench of the NCLT, said that the tribunal will see to it that the case is disposed of before July 10.

The bench stated this when advocates told Jinan and Gosavi that according to a Supreme Court order, daily hearing in this case is supposed to recommence in the NCLAT on July 10.

Dalmia Bharat, which was the previous H1 bidder for Binani Cement, had moved the Supreme Court pleading to obtain a stay order on the ruling of the NCLT and NCLAT which ordered the Committee of Creditors (CoC) of Binani Cement to consider UltraTech’s plan and take into account the one from Dalmia Bharat-led consortium only if it matches UltraTech’s proposal.

While the Supreme Court did not stay the process, it listed the case to be heard on a daily basis in the NCLAT, where Dalmia Bharat had previously filed another petition of a similar stature. The NCLAT had listed the case on July 10 after which it will be heard on a daily basis.

Legal sources among the contending parties for the takeover of Binani Cement stated that before the case is heard on a daily basis in the NCLAT, which will take a call on UltraTech’s proposal, the NCLT needs to dispose of the case placed before it. “Thus, in all likelihood, the NCLT is poised to pass its verdict on the Binani Cement takeover case not later than July 10,” a source said.

On the other hand, the Supreme Court on Monday clearly stated that even though the CoC is at liberty to go ahead with the resolution process of Binani Cement, the country’s apex court will take the final call in this regard.

Following implications of the Supreme Court order, sources close to Dalmia Bharat said that the CoC may proceed with the insolvency process but it cannot take a final call on this matter before the NCLAT had thoroughly heard the case.

On the other hand, sources opposing the takeover of Binani Cement by Dalmia Bharat stated that it implies that the NCLT can decide on the matter but “it cannot be implemented unless the Supreme Court gives a nod to its decision”.

“The Supreme Court is now taking interest in this case and from Monday’s proceedings it is clear that the final call rests with the Supreme Court,” a legal source with Dalmia Bharat said.

As such, legal sources representing UltraTech in the NCLT said that the company may have to undergo a three-stage approval process — from NCLT, NCLAT and the Supreme Court — before acquiring assets of Binani Cement.

On Monday, after the resolution professional of Binani Cement submitted UltraTech’s plan to NCLT for approval, Rajputana Properties — the Dalmia Bharat-led consortium, raised objections primarily over UltraTech’s ineligibility under Section 29(A) of the IBC to offer any resolution plan. The bench, in turn, directed this company to file its objections in an affidavit in the next seven days.

However, the NCLT rejected Dalmia Bharat’s plea to vet the offer from UltraTech Cement.

Marred by a fresh series of litigations after as many as 14 were disposed of last month, the Binani Cement takeover case is up for hearing on June 18 in the NCLT, July 2 in the Supreme Court and July 10 in the NCLAT.

Progress so far

• Supreme Court finally clears its intention to pass the final verdict in the Binani Cement case
• The NCLT expected to pass final decision on UltraTech’s plan by July 10
• Hearing in the NCLAT to proceed on a daily basis from July 10
• Dalmia Bharat to submit its objections to UltraTech’s plan in the NCLT within seven days