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Binani Cement Resolution Professional Acting Contrary To Law, Says MSME Creditors’ Lawyer

A group of creditors of Binani Cement has filed an intervention petition at the NCLT.

Indian labourers unload bags of cement from a truck in Gurugram, India (Photographer: Adam Ferguson/Bloomberg News)
Indian labourers unload bags of cement from a truck in Gurugram, India (Photographer: Adam Ferguson/Bloomberg News)

A group of creditors of Binani Cement Ltd. has filed an intervention petition at the National Company Law Tribunal against the firm's insolvency resolution professional and its committee of creditors.

The group consisting of eight micro, small and medium-sized enterprises, supplied transportation, packaging and other materials to Binani Cement and is claiming total dues of over Rs 37 crore from the company.

SK Singhi, a lawyer representing the group, said that the resolution professional did not verify or consider their claims. "According to rule 13(1) of the Insolvency and Bankruptcy Code, the resolution professional has to verify claims made within seven days of receipt of the claim. But without doing that, the RP, has proceeded further and there is no verification at all", Singhi told BloombergQuint in an interview.

The resolution professional is acting contrary to the law and the process has not been followed properly.
SK Singhi, Lawyer, Binani Cement’s MSME Creditors 

The operational creditors also want their claims to be treated equally with other creditors. "There should not be any loss to the operational creditors and scheme should include my claims also and we should be paid accordingly," said Singhi.

The eight MSMEs who have filed this petition include Sree Khemisati Polysacks, Balaji Roadlines, Vipul Marketing, Shama Enterprise, Ganpati Plastfab, Sai Shraddha Corporation, Jai Enterprise and Shree Ganpatlal Onkarlal.

Binani Cement: Rival Offers

The petition comes even as UltraTech Cement Ltd. Chief Financial Officer Atul Daga told BloombergQuint that India's largest cement maker is ready to fight it out in the Supreme Court, if need be, to acquire debt-laden Binani Cement, which is currently undergoing insolvency resolution.

Earlier, Binani Industries Ltd. announced that it will apply to the National Company Law Tribunal seeking termination of the insolvency process that its cement arm is currently undergoing. That’s after the company entered into an agreement with Aditya Birla Group-owned UltraTech to sell 98.43 percent stake in Binani Cement for Rs 7,266 crore.

Watch the full interview here.

Edited excerpts.

You represent eight operational creditors who have moved against the resolution professional and the committee of creditors in the NCLT? What is the nature of this complaint?

The operational creditors have made an application before the tribunal for intervention in the main application. The operational creditors’ claims, which were filed before the resolution professional, have not been verified and considered. So, this application is about intervention in the main matter.

What is the main grouse of the operational creditors against the resolution professional?

As per the rule 13(1) of the Insolvency and Bankruptcy Code , the resolution professional has to verify claims made within seven days of receipt of the claim. But without doing that, the resolution professional, has proceeded further and there is no verification at all. That is the main ground. The resolution professional is acting contrary to the law and the process has not been followed properly.

Are you seeking damages or what is the intent of this application?

No, we are not seeking any damages. All what my application is seeking is that my claim which has been filed needs to verified and we should be considered at par with other creditors. There should not be any loss to the operational creditors and scheme should include my claims also and we should be paid accordingly.

Did the operational creditors bring these issues the notice of the committee of creditors or the promoters before they moved the NCLT?

Yes we have been representing before the resolution professional and we went to the committe of creditors as well.

All assurances were given that we’d be adequately heard and considered but nothing has happened.

So, do you expect this petition to be clubbed with the main petition before the NCLT?

That’s difficult to say. The tribunal on the last date has directed the department to list this creditors’ application along with the main matter for consideration. Finally, I don’t know what will happen. The matter comes up tomorrow.