2020 (1) TMI 1508 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of petition - withdrawal petition filed stating that consequent to filing of said application the Corporate Debtor has approached the applicant for settlement of the outstanding dues and offered to settle the amount - HELD THAT - The said offer was accepted by the Financial Creditor with terms and conditions. The One Time Settlement certain terms and conditions are duly accepted by the Corporate Debtor and remitted initial 5% of the One Time Settlement amounting to ₹ 62.50 Lakhs on 13.12.2019. Petition dismissed as withdrawn.

Summary

Issues:
1. Initiation of insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016 by a Financial Creditor against a Corporate Debtor.
2. Default on a term loan leading to the classification of the account as a Non-Performing Asset.
3. Counter arguments by the Corporate Debtor regarding the project, financial assistance obtained, and willingness to settle the dispute.
4. Attempts at settlement between the parties, including the submission of a revised proposal and deposit of a certain amount towards settlement.
5. Petition for withdrawal of the insolvency application by the Financial Creditor following an offer from the Corporate Debtor for a settlement amount.

Analysis:
1. The judgment pertains to a petition filed by a Financial Creditor, a bank, under Section 7 of the Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor, a company, for initiating insolvency resolution proceedings due to default on a term loan amounting to ?20,86,53,945.00 as on 04.10.2019, which was disbursed on 28.09.2015. The Corporate Debtor's existence falls within the territorial jurisdiction of the Tribunal, and the Financial Creditor sought the appointment of an Insolvency Resolution Professional (IRP) for recovery of the outstanding amounts.

2. The Corporate Debtor, in response, provided details about the project, financial assistance obtained from various banks, and efforts to secure additional funds. The State Bank of India and State Bank of Travancore sanctioned amounts with delays and additional conditions, while Union Bank did not grant financial assistance. The Corporate Debtor eventually approached the Financial Creditor for a loan, which was disbursed. The Corporate Debtor claimed to have repaid a substantial amount towards the principal and interest, expressing readiness to settle the dispute under a One Time Settlement Scheme.

3. Several attempts at settlement were made between the parties, with the Corporate Debtor submitting a revised proposal and depositing an initial amount towards settlement. The Financial Creditor filed a petition for withdrawal of the insolvency application after the Corporate Debtor offered to settle the outstanding dues for ?12.50 Crores, which was accepted by the Financial Creditor with terms and conditions. The Corporate Debtor complied with the initial conditions of the settlement, leading to the withdrawal of the insolvency application.

4. Consequently, the Tribunal disposed of the matter as withdrawn following the Financial Creditor's petition for withdrawal and compliance with the One Time Settlement terms by the Corporate Debtor. The Tribunal did not pass any order as to costs, and the case was concluded on the 6th day of January 2020.