Lawstreet Journal

Binani Industries Limited V Bank of Baroda: Rights Of Financial Creditor And Operational Creditor

Lawstreet Journal 5 Apr 2021 11:10pm

Image courtesy: Lawstreet Journal Business Binani Industries Limited V Bank of Baroda: Rights Of Financial Creditor And Operational Creditor

The main focus of the Insolvency and Bankruptcy Code, 2016 is to provide the resurrection and resolution of a debtor in a time bound manner for maximization of value of debtor’s assets. The NCLAT has in Binani Industries Limited vs. Bank of Baroda & Another [1], in a emphatic manner settled two important principles for the insolvency resolution process. One being the aim of the Committee of Creditors has to be towards maximization of the value of debtor and second, the ‘Resolution Plan’ submitted by the ‘Resolution Applicant cannot discriminate between the different class of creditors inter se. further, the Committee of Creditors while approving the ‘Resolution Plan’ cannot favour the ‘Resolution Plan’ which is discriminatory. 

1: Facts of the Case:

Appeals were filed before the NCLAT, against an order [2] of the NCLT [3] passed in ‘Corporate Insolvency Resolution Process’ [4] initiated by Bank of Baroda against Binani Cement Limited [5] under S. 7 of the Insolvency and Bankruptcy Code, 2016 [6]. Mr. Vijaykumar V. Iyer, Resolution Professional [7] had filed an application under S. 30 and 31 of IBC. read with Regulation 39 of the ‘Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate persons) Regulations, 2016 [8] for approval of the ‘Resolution Plan’ for the Corporate Debtor. The Resolution Plan ‘Rajputana Properties Private Limited’ [9] had been approved by the majority in the ‘Committee of Creditors’ [10] while the revised Resolution Plan submitted by ‘Ultratech Cement Limited’ [11] was not considered by the CoC.

There were three questions before the… Continue Reading...

Tagged: Bank of Baroda   Binani Cement  
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