Vinod Ramnani vs Icici Bank Ltd & Ors

Vinod Ramnani ...Appellant

Versus

ICICI Bank Ltd. & Ors. ...Respondents

Present: For Appellant: Mr. Shashi Kiran Shetty, Sr. Advocate with Mr. Mahesh Thakur and Mr. Samarth Sreedhar, Advocates. For Respondents: Mr. Anand Shankar Jha and Mr. Arpit Gupta, Advocates. Mr. Abhishek Anand and Mr. Pankaj Srivastava, Advocates for R-2 (IRP)

ORDER

(Through Virtual Mode)

10.08.2020: Mr. Shashi Kiran Shetty, Sr. Advocate, learned counsel for the

Appellant submits that a post-admission development has taken place in the form

of a settlement and under the terms of settlement forming page 176 to 180 of the

appeal paper book the Appellant-Corporate Debtor has made a part-payment of

Rs.4.5 crores to the Respondent.

2. Shri Anand Shankar Jha, Advocate representing Respondent No. 1 submits

that three instalments are still pending. It is brought to our notice by Shri Abhishek

Anand, Advocate representing Respondent No. 2 (IRP) that the Committee of

Cont'd....../ -2-

Creditors is yet to be constituted. Thus, there would be no legal impediment in

seeking an exit from the Corporate Insolvency Resolution Process through the

medium of settlement inter-se the Financial Creditor and the Corporate Debtor.

Learned counsel for the Appellant submits that he would not press the appeal, if

stay granted by the Hon'ble High Court of Karnataka in Writ Petition No. 6640/2020

is extended for a period of two weeks to enable the Appellant/Corporate Debtor to

approach the Adjudicating Authority (National Company Law Tribunal), Bangalore

Bench for invoking its jurisdiction under Rule 11 of the National Company Law

Tribunal Rules, 2016 in terms of Settlement Agreement and giving effect to it.

3. After hearing learned counsel for the Appellant and learned counsel for the

Respondents, we find that there should be no hesitation in accepting the course

suggested by learned counsel for the Appellant but we are constrained to observe

that condition no.3 incorporated in the Terms of Condition of the Settlement

Agreement on page 178 of the appeal paper book providing for keeping the

Corporate Insolvency Resolution Process in abeyance for a period of 90 days is in

conflict with the object of the statute viz. Insolvency and Bankruptcy Code, 2016

and is unenforceable for being void. Beyond this condition, other terms and

conditions of the Settlement Agreement can be pressed before the learned

Adjudicating Authority who will have the power and jurisdiction to terminate the

Company Appeal (AT) (Insolvency) No. 673 of 2020 -3-

Corporate Insolvency Resolution Process by giving effect to the Settlement

Agreement.

4. We accordingly dispose of this appeal. Keeping in view the interim stay passed

by the Hon'ble High Court of Karnataka, we direct to keep the constitution of

Committee of Creditors on hold for a period of two weeks from today to enable the

Appellant-Corporate Debtor to take steps for invoking jurisdiction of the

Adjudicating Authority in terms of Rule 11 of the NCLT Rules, 2016.

5. We make it clear that if in terms of the Settlement Agreement any instalment

falls due for payment within the period of aforesaid two weeks, the payment thereof

shall be effected by the Corporate Debtor in accordance with the terms of Settlement

Agreement. This appeal stands disposed of. No costs.

[Justice Bansi Lal Bhat] Acting Chairperson

[V. P. Singh] Member (Technical)

[Dr. Alok Srivastava] Member (Technical) am/gc

Company Appeal (AT) (Insolvency) No. 673 of 2020