2020 (2) TMI 1128 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation - HELD THAT - Learned counsel for the Appellant submits that the 'State Bank of India' has 91% voting share and therefore, any settlement with them will amount to settlement under section 12A. Instead of granting further time, we allow the Appellant to file an application under section 12A before the 'Committee of Creditors' - Appeal disposed off.

Summary

Issues Involved:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process.
2. Ground of application being barred by limitation.
3. Rejection of one-time settlement by the State Bank of India.
4. Possibility of settlement under section 12A due to the State Bank of India's voting share.
5. Permission to file an application under section 12A before the Committee of Creditors.
6. Direction for the Appellant to give a revised offer within a week.

Analysis:
1. The State Bank of India, as the Financial Creditor, filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the corporate insolvency resolution process against Priknit Retails Limited, the Corporate Debtor. The National Company Law Tribunal admitted the application on 11th September, 2019.

2. During the appeal, the Appellant raised the sole ground that the application under section 7 was time-barred. Additionally, the Appellant expressed readiness to settle the matter with the State Bank of India and indicated a willingness to file an application under section 12A of the I&B Code if necessary.

3. Subsequently, it was disclosed that the Appellant's attempt for a one-time settlement with the State Bank of India was declined by the Bank, leading to further legal considerations.

4. The Appellant's counsel argued that the State Bank of India holds a significant 91% voting share, suggesting that any settlement with them could potentially qualify as a settlement under section 12A of the I&B Code.

5. In light of the circumstances, rather than granting additional time, the Appellate Tribunal permitted the Appellant to submit an application under section 12A before the Committee of Creditors to explore the possibility of a settlement.

6. The Tribunal directed the Appellant to present a revised offer within a week, emphasizing that this action should not impede the Interim Resolution Professional/Resolution Professional from continuing with the insolvency resolution process as per the law, unaffected by the Tribunal's orders.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal regarding the insolvency and bankruptcy proceedings, including the grounds for appeal, settlement attempts, and procedural directions for the parties involved.