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TMI Blog2022 (7) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... ineated under Section 12A of the Code as well as Regulation 30 A of the CIRP Regulations, 2016 which has been brought in the statute w.e.f. 06.06.2018 is a clear recognition of provisions and procedures for settlement in the IBC proceedings. In the facts of the present case and sequence of the events which is noticed above, thus one more opportunity be given to the Appellant to submit an Application under Section 12A to the IRP/ RP for being placed before the CoC which is in place in view of our order dated 15.03.2022 vacating the interim order on constitution of the CoC. Since the offer of Rs. 81 Crores of the Appellant is not accepted by the Bank, the Application may be filed by the Appellant only if it makes an offer under Section 12A Application for an amount of more than Rs.81 Crores. The CoC under the IBC has been given full freedom to grant an approval of 90% voting share to a proposal under Section 12A only thereafter Application can be filed before the Adjudicating Authority. The freedom of decision of the CoC is unfettered. However, in the facts of the present case, the CoC while taking a decision for accepting or rejecting of proposal under Section 12A may also take f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs.260 Crores by letter dated 19.03.2019. As per compromise, Rs.154 Crores was to be paid by 31.03.2019 and remaining balance of Rs.102 Crores was to be paid within 90 days. Although Nimitaya Group including the Corporate Debtor made the payment of Rs.156 Crores by 31.03.2019 but could not make the balance payment within three months as per the time granted. A Section 7 Application filed by the Allahabad Bank against the Corporate Debtor after acceptance of the compromise proposal was withdrawn on 11.04.2019. The Corporate Debtor could not pay the balance of Rs.102 Crores which led to filing of Section 7 Application by the Allahabad Bank in July, 2019. During pendency of Section 7 Application, the Respondent Bank invited bid from eligible Asset Reconstruction Companies (ARC s)/ Non-Banking Financial Companies (NBFC s)/ Financial Institution (FI s) for acquisition of categories of NPA s on 100% cash on As is where is Basis . The name of the Corporate Debtor was also mentioned in the invitation letter dated 18.01.2021 where INR 81 Crores was offer of Bank for acquisition of NPA of the Corporate Debtor. No bid was received by the Bank in pursuance of the Invitation letter dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Appellant to make deposit without any prejudice to the rights of the parties and approach the Bank for accepting the offer. We make it clear that we are not expressing any opinion at this stage regarding the claim of the Appellant. However, we are of the view that Interim Order dated 05.01.2022 is modified and let the Committee of Creditors be constituted. However, the Interim Resolution Professional shall ensure that Company remains a going concern . List this Appeal on 19th April, 2022. 3. Respondents have filed their Reply-Affidavit. Appellant has also filed an Additional-Affidavit. 4. We have heard Shri Abhijeet Sinha, Learned Counsel for the Appellant and Shri Rajesh Kumar Gautam, Learned Counsel for the Respondents. 5. Learned Counsel for the Appellant submits that the grievance of the Appellant is that the Financial Creditor is not willing to settle with the Appellant in the same terms as it was ready to settle with ARCs. It is submitted that the Bank has invited a bid for NPA of the Corporate Debtor for an amount of Rs.81 Crores and when the same amount with the same conditions of repayment was being offered by the Appellant, the same has been rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her entities. An amount of Rs. 154 Crores was paid by 31.03.2019 and due was only Rs.102 Crores which remains to be paid. Consequently, an earlier compromise failed. Subsequent to filing Section 7 Application, the Bank had issued a proposal for sale of NPAs to Asset Reconstruction Companies (ARC s)/ Non-Banking Financial Companies (NBFC s)/ Financial Institution (FI s) vide its Notice dated 18.01.2021. Copy of the proposal for sale notice in Annexure A-9 annexed in the Appeal in which under heading NPAs with book balance of above Rs. 50.00 Crs. and upto 100 Crs. . The Corporate Debtor is mentioned at Item No.1 with following details:- II NPAs with book balance of above Rs.50.00 Crs. and upto 100 Crs S No. BRANCH NAME OF THE ACCOUNT BALANCE TOT.DUES RESERVE PRICE DATA ROOM 1 SAMB, DELHI NIMITAYA HOTEL and RESORTS LTD. 99.69 152.34 81.00 SAM Delhi Branch, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of the Bill indicates, the objective of the IBC is to facilitate insolvency resolution in a time bound manner for maximisation of the value of assets, promotion of entrepreneurship, ensuring the availability of credit and balancing the interest of all stakeholders . 29. The IBC is a complete code in itself. The Adjudicating Authority and the Appellate Authority are creatures of the statute. Their jurisdiction is statutorily conferred. The statute which confers jurisdiction also structures, channelises and circumscribes the ambit of such jurisdiction. Thus, while the Adjudicating Authority and Appellate Authority can encourage settlements, they cannot direct them by acting as courts of equity . 11. Learned Counsel for the Respondent has relied on the judgment of the Hon ble Supreme Court in Bijnor Urban Cooperative Bank Limited, Bijnor and Ors. vs. Meenal Agarwal and Ors.- 2021 SCC OnLine SC 1255 wherein the Hon ble Supreme Court has laid down following in paragraph 30:- 30. The sum and substance of the aforesaid discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the IBC has been given full freedom to grant an approval of 90% voting share to a proposal under Section 12A only thereafter Application can be filed before the Adjudicating Authority. The freedom of decision of the CoC is unfettered. However, in the facts of the present case, we are of the view that CoC while taking a decision for accepting or rejecting of proposal under Section 12A may also take following factors into consideration:- (i) The Bank had issued a proposal for sale of NPA of the Corporate Debtor to the Asset Reconstruction Companies (ARC s)/ Non-Banking Financial Companies (NBFC s)/ Financial Institution (FI s) for an amount of Rs.81 Crores. (ii) Whether the Financial Creditor looking to the assets of the Corporate Debtor shall be able to realise an amount more than offered by the Appellant either in the insolvency resolution process by Resolution Plan or a liquidation process. (iii) The maximisation of the assets of the Corporate Debtor is one of the objectives, equally important is the recovery of the financial dues of the Bank and we have no doubt that CoC while taking a decision shall take decision under which it shall be able to realise its dues to ..... 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