SC rejects out-of-court settlement of Binani Cement bankruptcy case

The Supreme Court’s decision comes as a setback for Ultratech Cement, which had informed the stock exchanges that it had obtained the Competition Commission of India's (CCI) approval for its bid for the debt-laden company.

The resolution professional for the Binani Cement bankruptcy case had earlier advised the committee of creditors to accept the bid by Dalmia Bharat outfit as it was the highest bid at that time.

Ultratech reentered the scene claiming that it was forced to quote a lower amount due to objections raised by the resolution professional and that "they were wrongly and unjustifiably rated H2 instead of H1".

UltraTech also claimed that the CCI clearance validated its contention.

Dalmia Cement (Bharat) rejected this with its group CEO Mahendra Singhi claiming: "The reasons cited by the unsuccessful bidder for its failed bid, in stock exchange filings and press interviews, are misleading. We have made the highest financial bid and had also obtained the highest score in the evaluation."

Binani Industries, the parent company of insolvent Binani Cement, had earlier informed the National Company Law Tribunal's Kolkata bench that it has moved the Supreme Court for termination of insolvency proceedings against its cement manufacturing subsidiary.

The company had filed the application in the apex court for setting aside the April 5 order of the National Company Law Appellate Tribunal (NCLAT), which observed that "pendency of the appeal will not come in the way of the Adjudicating Authority to proceed with the Corporate Insolvency Resolution Process in accordance with provision of I&B (Insolvency and Bankruptcy) Code, 2016".

The company had submitted an application to the tribunal to seek termination of insolvency proceedings against its cement manufacturing subsidiary and its counsel had said it could pay all its creditors.

The move came after it concluded a commercial understanding with UltraTech Cement to sell its entire 98.43 per cent stake in the subsidiary at a consideration of Rs7,266 crore. Later, the offer was reportedly revised upwards. "We are offering Rs1,100 more to the creditors than that of Dalmia Bharat in the out-of-tribunal settlement. The company is willing to settle with everyone with 120 per cent payment," the company's counsel had said in his submission before the tribunal.