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TMI Blog2018 (9) TMI 1925X X X X Extracts X X X X X X X X Extracts X X X X ..... ating insolvency proceedings against the petitioner; to quash the order dated 10.9.2018 passed in a company petition no. (IB) 330/ALD/2018, ICICI Bank Limited Vs. Jaiprakash Associates Limited instituted before National Company Law Tribunal (in short NCLT); and to direct the NCLT to sanction the scheme of arrangement filed by the petitioner which is pending consideration in company petition no.(AAA)90/ALD/2018 in accordance with law within a fixed period of time. The prayers so made by the petitioner in the petition are reproduced herein below for the sake of convenience:- (i) to issue a writ, order, or direction in the nature of certitorari quashing the impugned direction dated 14.8.2018 [Annexure-1 to this writ petition] given by the Reserve Bank of India [respondent no.1] to ICICI Bank Limited [respondent no. 2.] (ii) to issue a writ, order, or direction in the nature of certitorari quashing the order dated 10.9.2018, [Annexure-2], and all proceedings and order passed in the Compnay Petition No. (IB) 330/ALD/2018- ICICI Bank Ltd Vs. Jaipraksh Associates Limited, which has been filed by Respondent no. 2 in the National Company Lat Tribunal, Allahabad Bench, [Respondent no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or installment of the amount of debt due and payable and which is not repaid by the debtor or the corporate debtor amounts to 'default'. Learned Senior counsel appearing for the petitioner also stressed that there is no specific direction of the Supreme Court in the case of Chitra Sharma Writ Petition No. 744/2017 Chitra Sharma and others Vs. Union of India and others and connected petitions decided on 9.8.2018. and connected petitions decided on 9th August 2018 directing or permitting the RBI to issue any direction in exercise of powers under Section 35 AA of the Banking Regulation Act for drawing insolvency proceedings against the petitioner. The direction issued by the RBI is based upon complete misreading of the aforesaid decision of the Supreme Court. The petitioner is not a 'defaulter'. The consortium of lenders which includes ICICI Bank itself had accepted vide letter dated 7th December 2017 that a Composite Restructuring and Realignment Plan (CRRP) for JAL was approved by the majority of 90% of the Joint Lenders' Forum (JLF) present and voting under the aegis of the RBI Circular dated 5th May 2017 and that all steps required towards regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for admitting the petition under Section 7 of the IBC. The said stage in the matter has not yet arrived. It is therefore, open for the petitioner to establish "no default" on its part before the Adjudicating Authority/NCLT. The issue of default, if any, is an issue of fact depending upon the evidence and this Court finds itself unequipped for deciding such factual issue more particularly when they can be dealt with and decided by the other statutory authority before whom the proceedings are pending. It would not be proper for us to ignore the decision of the Supreme Court in Chitra Sharma (Supra) or to leave untouched the submission of Sri Ranjit Kumar that the aforesaid decision does not in so many words directs or permits RBI to issue any direction against the petitioner for adopting insolvency proceedings. The aforesaid proceedings before the Supreme Court were initiated by the home buyers to protect their interest in projects of JIL, a wholly owned subsidiary of the petitioner. The insolvency proceedings under Section 7 of the IBC were initiated against the JIL by the IDBI Bank Limited contending that it had committed 'default' of Rs. 526.11 crores in repayment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I constituted an internal Advisory Committee ((IAC) consisting primarily of its independent directors. The IAC took up for consideration accounts which were classified either partly or wholly nonperforming from amongst the top 500 exposures in the banking system as on 31st March 2017. As a first step, the IAC recommended all such non-performing asset accounts with fund and non-fund based outstanding exceeding Rs. 5,000/- crores. The IAC has initially taken up twelve accounts involving total exposures of Rs. 1,79,769 crores. JIL was one of the twelve accounts in respect of which directions have been issued to banks for initiating insolvency resolution. Subsequently,the IAC recommended that in respect of those accounts where 60% or more had been classified as NPAs as on 30 June 2017, banks may be directed to implement a viable resolution plan within six months failing which the accounts may be directed to a reference under the IBC by 31 December 2017. JAL was one such entity. No viable resolution plan could be found as a result of which it is also required to be referred for CIRP. Corporate Insolvency Resolution Process. 41........................ ........................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI is bad in law, we do not find that ICICI Bank independent of the said direction is precluded from initiating Corporate Insolvency Resolution Process against the petitioner who happens to be a corporate debtor under the IBC. Section (7) of the IBC permits a financial creditor to file application for initiating Corporate Insolvency Resolution Process against the corporate debtor when a 'default' has occurred. Therefore, the filing of application for initiating Corporate Insolvency Resolution Process by the petitioner who is a financial creditor is not prohibited under law even if there is no direction to the said effect by the RBI. Therefore, the direction of the RBI dated 14.8.2018 has no material bearing upon the proceedings initiated by ICICI Bank under Section 7 of the IBC. This apart, the Court will not come to the rescue of the petitioner on mere technicalities unless there is serious miscarriage of justice which is missing in the case at hand. No serious prejudice is likely to be caused to the petitioner if it participates in the proceedings under Section 7 of the IBC wherein it has already taken objections regarding the maintainability of the petition and n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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