2021 (8) TMI 1376 - AT - Insolvency and Bankruptcy

Seeking stay on proceedings - settlement already arrived at (or not) - Intervenor is opposing the settlement claiming that the Corporate Debtor cannot settle merely with one of the Creditors - HELD THAT - The 'Interim Resolution Professional' will place this order before the banks, in which accounts of 'Corporate Debtor' are maintained. The Bank Account(s) of the 'Corporate Debtor' be allowed to be operated through IRP/RP for day-to-day functioning of the company such as for payment of current bills of the Suppliers, salaries and Wages of the employees/workmen, electricity bills etc. On 10th August, 2021, the IRP are stayed from issuing publication. That order is recalled - The IRP may proceed further with CIRP but, however may not constitute Committee of Creditors till this matter comes up on next date. This time till next date the Appellant and Respondents are given so that if they want to take opportunity before the Adjudicating Authority to settle in terms of Section 12-A of IBC read with Rule 11 of NCLT Rules they may try to settle if they want to do that. If by the next date, Section 12-A of IBC Proceeding is not completed, the Interim Orders may or may not be continued. It is stated that Application under Section 12-A of IBC is already filed. If the parties have filed or if the parties file Application under Section 12-A of IBC read with Rule 11 of NCLT Rules through IRP or directly to the Adjudicating Authority, the Adjudicating Authority is requested to take up the same at the earliest and decide the same one way or the other as per law. List the Appeal 'For Admission (After notice)' Hearing on 13th September, 2021.

Summary

Issues involved: Settlement of disputes, intervention application by a creditor, quashing of impugned order, handing over assets and records of the corporate debtor, operation of bank accounts, stay on publication, Section 12-A of IBC proceedings.

The judgment by the National Company Law Appellate Tribunal, New Delhi, involved various key issues. Firstly, the parties had settled their disputes, leading to a request to quash the Impugned Order due to the settlement. However, an Intervention Application was made by a creditor, the Central Bank of India, which had an outstanding debt against the Corporate Debtor. The Intervenor opposed the settlement, arguing that the Corporate Debtor cannot settle with only one of the Creditors. The Tribunal considered the settlement request but decided not to interfere in the appeal, leaving it for the Adjudicating Authority to handle when other creditors are involved.

Regarding the handing over of assets and records of the Corporate Debtor, the Tribunal directed the Appellant, Directors, and Shareholders to do so immediately if not yet handed over. The Interim Resolution Professional was tasked with ensuring the Company remains a going concern, with assistance from the suspended Board of Directors and officers. The Tribunal outlined specific procedures for the operation of bank accounts, including authorization for cheque signing by the Interim Resolution Professional.

Additionally, the Tribunal addressed the stay on publication, allowing the IRP to proceed with Corporate Insolvency Resolution Process (CIRP) but refraining from constituting the Committee of Creditors until the matter is reviewed further. The parties were given time to settle under Section 12-A of IBC before the next hearing date. The Tribunal emphasized the importance of expeditiously handling applications under Section 12-A of IBC to be decided promptly by the Adjudicating Authority.

In conclusion, the Tribunal set a date for the Appeal 'For Admission (After notice)' Hearing and provided detailed instructions and directives to ensure the orderly resolution of the issues at hand in compliance with the relevant legal provisions and rules.