2025 (2) TMI 1062 - AT - IBC

Admissibility of Section 7 Application - interim order in this Appeal is continuing from 21.02.2024 and a period of one year has elapsed and Appellant has not agreed to all Terms of Settlement - HELD THAT - The letter dated 18.01.2025 which is a Amendatory Settlement Letter which was issued by ICICI Bank and the Clause-e existing clause and amended clause where both the clauses contemplate that on or before the due date the entire Settlement Amount shall be released from the Fund Escrow Account to the Collection Account of the ICICI Bank. The settlement between the parties can be arrived only when both the parties agrees with all terms and conditions. No direction can be issued to modify or change the Terms of Settlement as proposed by the ICICI Bank. The Appeal was disposed of on 22.11.2024 permitting Financial Creditor to file 12A application within the time allowed which time was extended from time to time. From the facts brought on record it is clear that as on date both the parties have not agreed and signed any Settlement Agreement so that an application under Section 12A can be filed for withdrawal of the CIRP. It is already noticed the submission of the learned Counsel for the Canara Bank who has claimed that it has also dues on the Corporate Debtor who also contends that no further indulgence be granted to the Appellant. Conclusion - The Appellant was not entitled to further extensions for settlement and application rejected. Application dismissed.

Summary

The National Company Law Appellate Tribunal considered an appeal challenging an order of the National Company Law Tribunal admitting a Section 7 Application filed by ICICI Bank Ltd. The Appellant initially submitted a proposal for settlement, leading to an interim order granting time for consideration. Subsequently, the Appellant expressed intent to settle the dues, prompting the Tribunal to advise pursuing the route of Section 12A of the Insolvency and Bankruptcy Code through the Interim Resolution Professional (IRP) for settlement. The Appeal was disposed of with liberty granted for a limited period for further actions based on the settlement process.Following the final disposal, the Appellant filed multiple applications seeking extensions of time for settlement-related matters. The Tribunal granted extensions but emphasized that failure to file an application under Section 12A would result in the commencement of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Despite these extensions, subsequent developments revealed disagreements between the parties regarding settlement terms, particularly concerning the transfer of settlement amounts. The ICICI Bank opposed further extensions, citing the Appellant's failure to fully agree to the settlement terms.After hearing arguments from both parties, the Tribunal concluded that the Appellant was not entitled to further extensions for settlement and rejected the application. Consequently, the CIRP against the Corporate Debtor was set to commence in accordance with the law.In summary, the Tribunal's decision centered on the Appellant's failure to reach a complete settlement agreement with ICICI Bank, leading to the denial of further extensions and the initiation of the CIRP process against the Corporate Debtor.