2018 (3) TMI 1811 - HC - Companies Law

Debt Resolution Plan - It is argued by the learned Senior counsel for the petitioner that no such resolution has been made by the Bank - HELD THAT - This Court finds that an arguable case appears in favour of the petitioner and if notice is not issued and an appropriate order of interim protection is not granted, the petitioners unit will be taken over as per the provisions of Sections 16 and 17 of the Insolvency and Bankruptcy Code, 2016. It is also not disputed that a proceeding has been initiated under Section 10 of the aforesaid Code. Issue notice to the opposite parties by Speed Post, making it returnable within a period of three weeks, indicating that the matter shall be disposed of at the stage of admission - List this matter on 12.4.2018.

Summary

Issues involved: Petition challenging non-resolution of debt under Insolvency and Bankruptcy Code due to loan amount below ?5,000 crores.

Analysis:
The petitioner, a company under the Companies Act, claimed to have obtained a loan from a bank consortium, but the amount was less than ?5,000 crores. The Reserve Bank of India's guideline under Annexure-2 outlined criteria for referring accounts for resolution under the Insolvency and Bankruptcy Code (IBC). The Internal Advisory Committee (IAC) recommended IBC reference for accounts with outstanding amounts greater than ?5,000 crores, with a significant portion classified as non-performing. For accounts below this threshold, the IAC suggested finalizing a resolution plan within six months. The petitioner contended that despite its debt falling below ?5,000 crores and making representations, no resolution was reached by the bank.

The court acknowledged the arguable case in favor of the petitioner, noting the risk of the petitioner's unit being taken over under the IBC provisions if interim protection was not granted. It was confirmed that proceedings had been initiated under Section 10 of the IBC. Consequently, the court decided to issue notice to the opposite parties through Speed Post, returnable within three weeks for expedited disposal at the admission stage. The parties were directed to file postal requisites promptly.

The court scheduled the matter for further proceedings on a specific date and directed a stay on the ongoing proceedings before the National Company Law Tribunal, Kolkata Bench related to the petitioner's case. Additionally, the court granted an urgent certified copy of the order upon proper application, ensuring the petitioner's rights were protected during the legal process.