G.R.K. Reddy vs Cici Bank Ltd & Ors

For 1st Respondent: Mr. D. Srinivasan and Ms. Madhusmita Bora, Advocates

For 2nd Respondent : Mr. K Moorthy, Advocate and Mr. R.K. Vasudevan, Resolution Professional Mr. B. Ramana Kumar Mr. Shambo Nandy, Advocate for 'SREI Equipment Finance Limited'

ORDER

30.09.2019 'ICICI Bank Limited' (Financial Creditor) filed an application

under Section 7 of the 'Insolvency and Bankruptcy Code, 2016 (for short, 'the

I&B Code') for initiation of 'Corporate Insolvency Resolution Process' against

M/s. Marg Limited (Corporate Debtor). The Adjudicating Authority (National

Company Law Tribunal), Division Bench, Chennai by impugned order dated 28th

May, 2019 admitted the application. The Appellant - 'Promoter' of the 'Corporate

Debtor' has preferred the appeal challenging the order of admission on one of

the ground that the rules of natural justice was violated as no adequate

opportunity was given to the 'Corporate Debtor'. However, the record suggests

that two counsel(s) appeared on behalf of the 'Corporate Debtor' and 2

submissions were made on behalf of the 'Corporate Debtor' was noticed by the

Adjudicating Authority.

2. Earlier, when the matter was taken up, learned counsel appearing on

behalf of the Appellant-Promoter of the 'Corporate Debtor' submitted that the

Appellant has settled the matter in terms of Section 12A of the 'I&B Code'. Today,

it is informed that the 'Committee of Creditors' by majority voting share of

95.96% has approved the 'Terms of Settlement' made under Section 12A of the

'I&B Code'.

3. Mr. D. Srinivasan, learned counsel appearing on behalf of the 'ICICI Bank

Limited' (Financial Creditor) accepts that by majority voting share of 95.96%, the

'Committee of Creditors' has approved the 'Terms of Settlement' under Section

12A. Therefore, the 'ICICI Bank Limited' has moved the application before the

Adjudicating Authority for withdrawal of application filed under Section 7 of the

'I&B Code'.

4. Mr. K. Moorthy, learned counsel and Mr. K. Vasudevan, the Resolution

Professional, who is also present in the Court submits that the 'Terms of

Settlement' under Section 12A has also taken care of fees of the 'Resolution

Professional' and the resolution cost, so he has no objection.

5. Mr. Shambo Nandy, Advocate has filed an application for intervention on

behalf of one of the 'Financial Creditor' - 'SREI Equipment Finance Limited' of

the 'Corporate Debtor'. Mr. Ashwini Kumar Matta, Senior Advocate along with

Ms. Sonakshi Dhiman, Advocate submits that they want to intervene on behalf

of 'M/s. Phoenix ARC Limited', another Financial Creditor of the 'Corporate

Debtor'. According to them, their claims have not been sufficiently redressed

by the Applicant/Promoter.

Company Appeal (AT) (Insolvency) No. 618 of 2019 3

6. Having heard the learned counsel for the parties and taking into

consideration the fact that the 'Terms of Settlement' proposed by the 'Promoters'

under Section 12A has been accepted by majority voting of 95.96% of the

'Committee of Creditors', we are not deciding the appeal on merit but allow the

prayer made by 'ICICI Bank Limited' (Applicant of Section 7 of the I&B Code) to

withdraw the petition filed under Section 7 of the I&B Code.

7. In the result, the impugned order dated 28th May, 2019 for initiating

the 'Corporate Insolvency Resolution Process' is set aside along with

consequential steps taken. The application under Section 7 filed by the 'ICICI

Bank' is disposed of as withdrawn.

8. The 'Corporate Debtor' is released from all rigour of law. The 'Resolution

Professional will hand over the assets and documents to the 'Corporate Debtor'

through 'Promoter'

9. The 'Corporate Debtor' is directed to pay the stakeholders/creditors in

terms of settlement reached under Section 12A within the period as approved by

the 'Committee of Creditors failing which it will be open to the 'ICICI Bank' to file

application for recall of this order and revival of 'Corporate Insolvency Resolution

Process' against the 'Corporate Debtor'.

10. The 'Resolution Professional' will be entitled for fees as per terms of

settlement under section 12A.

11. 'SREI Equipment Finance Limited' and 'M/s. Phoenix ARC Limited' who

have intervened, their counsel have taken plea that their claims as 'Financial

Creditors' have not been taken care in terms of settlement under Section 12A.

Company Appeal (AT) (Insolvency) No. 618 of 2019 4

We allow 'SREI Equipment Finance Limited' and 'M/s. Phoenix ARC Limited' to

negotiate the matter with the 'Corporate Debtor' independently who on collating

the claims will grant them the same treatment as given to the other similarly

situated 'Financial Creditors' and pay within 2 months from the date they will

move before the 'Corporate Debtor', failing which it will be open to these

'Financial Creditors' to move before the appropriate authority/court of law for

appropriate orders.

12. The appeal is allowed with aforesaid observations and directions. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

[ Kanthi Narahari ] Member (Technical) /ns/gc

Company Appeal (AT) (Insolvency) No. 618 of 2019