The tribunal has directed the committee of creditors to complete its resolution proceedings by June 23
The UK-based Liberty House owned by the Gupta family can still be in the race for Bhushan Power & Steel despite missing the deadline and its neglected bid document should be considered by the creditors, the National Company Law Tribunal (NCLT) has ruled on Monday.
Allowing the plea of the Liberty House has raised hopes of UltraTech Cement which wants to enter the bidding race for Binani Cement.
"The resolution professional shall place the unopened sealed cover apparently containing the resolution plan of the Liberty House before the next meeting of the Committee of Creditors (CoC)," the principal Delhi bench of NCLT said on Monday.
"The resolution plan of Liberty House shall not be rejected on the ground of delay emanating from process document or any other document internally circulated by the RP or CoC. The rejection shall be on some substantive ground as against flimsy one," the order added.
The tribunal has directed the committee of creditors to complete its resolution proceedings by June 23.
Liberty House Group Pte had earlier filed an application with the NCLT with a prayer to declare illegal, a decision of the CoC of Bhushan Power and Steel which had refused to entertain an application for resolution plan submitted by Liberty in February.
NCLT in last July had accepted the insolvency resolution case filed by Punjab National Bank (PNB) following which Mahender Khandelwal was admitted as a resolution professional. In September, expression of interest was floated to invite responses from bidders following which Tata Steel filed its application while Liberty Houses responded on November 12.
The deadline for submission of resolution plans was set for February 8 and Liberty House missed the deadline, putting its bid on February 20, a day before the committee of creditors met on February 21.
In the meeting, the CoC refused to open Liberty's bid leaving Tata Steel and JSW Steel in the race for taking over the assets of the bankrupt firm.
Liberty then moved court and argued before NCLT that the delay was because of it being a foreign company, registered in Singapore and its management took time to understand the business environment of India particularly at a time when the steel sector was passing through stress.
Like UltraTech in Binani Cement case, Liberty argued that the idea of restructuring proceedings is to culminate into a successful reorganisation plan.
"No consideration of plan due to delay in submitting the requisite resolution plan defeats the very objectives of insolvency resolution, " it argued.
Liberty also claimed that it had submitted a "highly competitive bid and that it is reasonably sure that the plan would succeed in as much as the applicant is a global giant in the relevant sector of power and steel."
Liberty Counsel argued that deadlines for submitting bids are not envisaged by the Insolvency and Bankruptcy Code (IBC) or regulations made under it but are put in place only to aid the completion of insolvency resolution process.
The CoC, on its part, argued that acceptance of Liberty's bid would open the floodgate to new resolution applicants till the last date of finalisation of resolution plan and that it might force existing applicants to withdraw their bids.
CONCRETE GAINS
- The tribunal has directed the CoC to complete its resolution proceedings by June 23
- The development gives hope to UltraTech Cement in its quest for Binani Cement
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