Race for Binani Cement: NCLAT refuses to stay out-of-court settlement process
In a setback for Dalmia Bharat, National Company Law Appellate Tribunal (NCLAT) refuses to stay out-of-court settlement process. So, the out-of-court talks can continue between the lenders as well as Binani Cement.
Dalmia Bharat had taken recourse to legal remedies given the fact that The NCLAT in an unprecedented order had allowed an out-of-court settlement between Binani and the lenders.
Dalmia Bharat had expressed concern that this was in violation of the Insolvency and Bankruptcy Code (IBC). There were bids made under the IBC process and that should be respected, and an alternate mechanism by way of out-of-court settlement should not be provided for, said Dalmia Bharat.
However, NCLAT has issued a notice to Binani Cement on this application by Dalmia and it will be heard again later this month.
On the other hand, reacting to the NCLAT order, Shardul Shroff, the counsel for Dalmia Bharat said, "The NCLAT that is the appellate authority has directed the NCLT, which is the adjudicating authority to proceed with the corporate insolvency resolution process, keeping in mind the mandate of Section 30 and 31 of the IBC code," reacted Shardul Shroff, the counsel for Dalmia Bharat. "What that means is 30 speaks of passing of the order, once you see qualification of the order are complete that means the plan has been approved by the CoC, with appropriate majority NCLT is required to approve the plan."
“Today NCLAT has directed NCLT to proceed ahead with the IBC process as per Section 30 and 31," said Mahendra Singh, Group CEO-Cement, Dalmia Bharat. "This means no out-of-court settlement or any activity, which is not as per provisions of IBC can be done by NCLT Kolkata.”
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