Harsh Kilachand vs Indian Bank & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 1267 of 2024
Ratio decidendi
The rule this decision rests on
A financial creditor's settlement of its debt after admission of a Section 7 application may be given effect through the mechanism of withdrawal under Section 12A of the Insolvency and Bankruptcy Code, 2016, read with Regulation 30A of the CIRP Regulations, 2016, and not by setting aside the admission order or disposing of the appeal on the strength of a one-time settlement alone; the financial creditor is to make its Section 12A application through the Interim Resolution Professional, who may take into account the CIRP costs incurred, while other financial creditors remain free to object if their dues are not settled. Where an appeal against admission of a Section 7 application is pending and the admitted financial creditor seeks to withdraw, the Appellate Tribunal may dispose of the appeal by granting liberty to that creditor to file the Section 12A application within a fixed period, direct the Interim Resolution Professional to list and dispose of it within a fixed period, and leave subsequent steps to be taken in accordance with the Adjudicating Authority's orders, while the Interim Resolution Professional continues the Corporate Debtor as a going concern pending those orders.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Harsh Kilachand ...Appellant
Versus
Indian Bank & Anr. ...Respondents
Present: For Appellant : Mr. Krishnendu Datta, Sr. Advocate with Mr. Pulkit Deora and Ms. Alina Merin, Advocates
For Respondent : Mr. Deepak Saxena, Mr. Shivanjali Mane and Mr. Kaushal Ameta, Advocate for Union Bank of India Mr. Kushal Bansal, Mr. Anish Ahlawat, Advs. for RP. Mr. Rajesh Kumar Gautam, Mr. Anant Gautam, Mr. Dinesh Sharma, Mr. Deepanjal Chaudhary and K. Nilesh Sahay, Advocates for Indian Bank Mr. Prakash Shinde and Ms. Niyati Merchant, Advocates for Intervenor (Bank of Baroda)
ORDER
(Hybrid Mode)
09.01.2025 Heard Learned Counsel for the Appellant. Learned Counsel
appearing for the Indian Bank as well as Learned Counsel for the Union Bank
of India and Bank of Baroda.
2. This Appeal has been filed against the order dated on 21.06.2024 by
which order Adjudicating Authority admitted Section 7 Application filed by
the Indian Bank. Application was initiated for Rs.43,23,26,516/- when the
appeal was taken for consideration. Learned Counsel for the Appellant had
submitted that proposal to the Indian Bank has been submitted for OTS on
04.07.2024, the following order was passed:
"04.07.2024: Learned Counsel for the Appellant submits that the Appellant has already submitted a proposal to the Bank for consideration. investor has already shown his interest that is communicated to the Bank and Bank is considering the proposal.
2. Shri Gautam, Learned Counsel appearing for the Respondent submits that he shall obtain instructions with regard to proposal of the Appellant. 3. List this Appeal on 19.07.2024.
In the meantime, in pursuance of the impugned order, Resolution Professional shall not take any further steps."
3. This Tribunal also recorded the subsequent proceeding, the status
report filed by the Resolution Professional and details of the claim received in
pursuance of the following advertisement.
4. The Counsel appearing for the Union Bank of India and Bank of Baroda
has also filed Intervention Application praying that they are also Financial
Creditors who have claim against the Corporate Debtor. Learned Counsel for
the Union Bank of India submits that they have already filed an application
of Section 11 against the Corporate Debtor which is pending before
consideration.
5. Learned Counsel for the Appellant submits that he has also submitted
an OTS to Union Bank of India. Today, when the matter was taken Learned
Counsel for the Appellant as well as Learned Counsel for the Indian Bank
submitted that OTS has already been accepted by Indian Bank and no dues
Company Appeal (AT) (Insolvency) No. 1267 of 2024 2 of 4 certificate has issued on 01.01.2025 and all payments have been made under
the OTS.
6. In the facts of the present case and in view of the law laid down with
Hon'ble Supreme Court in GLAS Trust Company the appropriate recourse to
be taken by the Appellant in the present matter is to permit the Financial
Creditors to file 12A Application through the IRP in accordance with Section
12A read with Regulation 30A of CIRP Regulation, 2016.
7. Learned Counsel for the IRP pointed out that CIRP cost has been
incurred. It is open for the Financial Creditor while filing the application under
Section 12A to take into consideration the CIRP cost by giving a Form 'FA' to
the IRP for filing the Application. The other Financial Creditors including
Union Bank of India, Bank of Baroda or any other Financial Creditors are free
to file their objections, in the event their dues are not settled or taken care of.
8. In view of the aforesaid, we see no reason to keep the appeal pending.
The Appeal is disposed of with giving liberty to the Financial Creditor - Indian
Bank to file an application under 12A through IRP in accordance with 12A
Regulation 30A which shall be done within two weeks from today. The IRP
shall take steps for getting the application listed and disposed of at an early
date for a period of within six weeks. The Committee of Creditors may not be
constituted, however, subsequent steps after six weeks shall be taken in
accordance with order passed by the Adjudicating Authority.
Company Appeal (AT) (Insolvency) No. 1267 of 2024 3 of 4
9. RP already being in place, he shall continue the Corporate Debtor as a
going concern till any orders are passed by the Adjudicating Authority.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) pks/nn
Company Appeal (AT) (Insolvency) No. 1267 of 2024 4 of 4
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