The legal counsel of UltraTech Cement, which had touched upon the decision from NCLT Delhi on Monday's hearing told Business Standard that they are going to cite this ruling as a "precedence set by NCLT" to appeal to the Kolkata bench of NCLT to ask the Committee of Creditors (CoC) of Binani Cement to consider the revised offer from UltraTech Cement which is Rs 11 billion higher than the one the CoC has already approved.
"This certainly strengthens the case for UltraTech Cement. Liberty House' bid was outside the deadline and it has still been admitted. On the other hand, UltraTech Cement's bid was submitted well in advance before the deadline and it only revised its offer", Siddhartha Mitra, legal counsel representing UltraTech Cement in the Kolkata bench of NCLT told this newspaper.
On Monday, Mitra told the tribunal that the CoC of Binani Cement had more than a month to consider the revised offer from the Aditya Birla Group company and there wasn't any need to hurry to select the offer from Dalmia Bharat Cement as the preferred bid when a higher offer from his client was placed before the CoC of Binani Cement.
Sources close to UltraTech Cement said the Kolkata bench of NCLT is aware of the ruling of the Delhi bench of NCLT on this matter and added that while the Kolkata tribunal passes judgement on the race for Binani Cement, it is likely to consider the Bhushan Power & Steel ruling as well.
UltraTech Cement has challenged the selection process of the H1 bidder and has contended that it was ranked lower than Dalmia Bharat Cement on account of flawed selection criteria, despite it upping its bid to over Rs 79 billion under which neither financial and operational creditors nor statutory authorities will be taking any haircut.
Some of the leading lenders to Binani Cement are also keen to accept UltraTech Cement's new offer provided it is legally viable and has consent from legal authorities.
The Kolkata bench has also been asking the CoC as well Dalmia Bharat that why it didn't modify the process document despite receiving higher bid amount.
The CoC responded that such a move will set a bad precedence and added that it had followed guidelines from the Central Vigilance Commission (CVC) and the Indian Bank Association (IBA) while framing the process document.
On the other hand, UltraTech Cement has contended that there is no such law which prescribes the CoC not to consider the offer from a runner-up bidder and IBA is a set of guidelines while the CVC is used for open tenders in the government.
Jinan K. R., member - judicial at the Kolkata bench of NCLT, on Monday, however, said that IBA guidelines are applicable for banks and not for the CoC.
Exim Bank, one of the public sector banks, which is taking an over 20 per cent haircut under the Dalmia Bharat Cement's resolution plan has also contended that the process document did not prevent the CoC from either negotiating with a runner-up bidder or consider a non-H1 plan.
On the other hand, sources close to Dalmia Bharat Cement stated that the Delhi bench of NCLT's ruling on the Bhushan Power & Steel case will not impact the Binani Cement saga as "these two cases are entirely different".
On April 24, the Kolkata bench of NCLT is expected to complete hearing of all cases and related petition on the Binani Cement case.