SC dismisses Dalmia Bharat challenge to NCLAT UltraTech order
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A bench of justices R F Nariman and Navin Sinha upheld the NCLAT's last week order which had allowed the Aditya Birla group firm to acquire Binani Cement by approving its revised Rs 7,950.34 crore bid over an offer by Rajputana Properties.
The bench said there was no infirmity in the NCLAT's order.
The NCLAT had approved UltraTech's resolution plan for Binani and rejected the resolution plan submitted by Dalmia Bharat's Rajputana Properties by terming it "discriminatory" and "unbalanced".
The top court's order came on a plea by Rajputana Properties against the NCLAT order.
In its order, the NCLAT had observed that the plan submitted by Rajputana discriminated between "equally situated" financial creditors and did not balance other stakeholders such as the operational creditors of Binani Cement.
Rajputana Properties had moved the appellate tribunal against the May 2 order of Kolkata bench of the National Company Law Tribunal (NCLT) that allowed the Resolution Professional and Committee of Creditors (CoC) of Binani to consider UltraTech's revised offer while affording Rajputana an opportunity to revise its resolution plan.
The CoC had earlier approved Rajputana's Rs 6,932.4-crore bid, but the decision was changed once UltraTech revised its offer.
The NCLAT had observed that the amended offer of UltraTech Cement has got 100 percent voting from the CoC and added that the intent of the Insolvency and Bankruptcy Code (IBC) was maximisation of the value of assets.
"We approve the revised resolution plan submitted by UltraTech Cement which shall be binding on the corporate debtor (Binani Cement) and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan," the NCLAT order had said.
The operational creditors of Binani, represented by Dhaval Vussonji, hailed the apex court order saying it has upheld the NCLAT's order "which emphasises that the corporate insolvency resolution process must maximise value for stake holders and there should not be any discrimination amongst creditors who are at least similarly placed."
The NCLAT had also dismissed the plea of promoters of Binani Industries for termination of the Corporate Insolvency Resolution Process after settling the dues with lenders under section 12 A of the IBC, saying that the application did not have the requisite 90 percent voting share of the CoC.
"Binani Industries cannot take advantage of Section 12A nor can be allowed to settle the matter," the NCLAT had said.
UltraTech is the leading cement manufacturer of the country with an installed capacity of 96.5 Million Tonnes Per Annum (MTPA) of grey cement.
It is already merging the cement business of BK Birla Group company Century Textiles and Industries, which has a capacity of 11.4 MTPA.
In its 44-page-long order, the NCLAT had observed that financial creditors such as "Edelweiss Asset Reconstruction Company, IDBI Bank, Bank of Baroda, Canara Bank, Bank of India and State Bank of India have been provided with 100 percent of their verified claim" but the resolution applicant Rajputana Properties has given "lesser percentage to Export-Import Bank of India 72.59 percent and State Bank of India-Hong Kong 10 percent".
On the other hand, the resolution plan submitted by UltraTech allows "maximization of assets of the Corporate Debtor (Binani Cement) while some amount of working capital has been infused (Rs 350 crores) and all the financial creditors and the Operational Creditors have been paid 100 percent of dues except the related parties," the NCLAT order had said. #casansaar (Source - MoneyControl)
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