Case Title:- ICICI Bank v. OPTO Circuits India Limited
The National Company Law Appellate Tribunal, Chennai, in the present case heard an appeal filed against the order of NCLT Bengaluru. In the aforementioned order, permission for withdrawal of the IBC petition was granted but instead of giving liberty to revive the CIRP, the Adjudicating Authority granted liberty to file a fresh petition under IBC against OPTO Circuits (India) Limited. The NCLAT held that, under such circumstances, application can be restored to initiate CIRP.
The case, in brief, is that the 1st Respondent Company had approached the Appellant Bank for various credit facilities and as such availed certain credit facilities. However, the Respondent Company committed a default in paying Rs. 1,07,85,59,340.96/- owing to which the Appellant Bank proceeded to initiate CIRP against the Defaulter Respondent Company u/s 7 of the Code. The application was admitted by National Company Law Tribunal (NCLT) but the Corporate Debtor moved the Hon’ble Karnataka High Court challenging the admission. The High Court granted an interim stay on CIRP, and in the meanwhile, the Corporate Debtor approached the Appellant with a One-time Settlement (OTS) proposal of Rs. 22.7 Crores towards full and final settlement. In pursuance of the same, Rs 4.5 crores were paid by the Respondent and the balance amount was to be paid within a period of 3 months.
This settlement arrangement was also recorded in NCLT as per Section 12 A of the IBC. During this the Appellant Bank had moved a memo seeking liberty to get the order dated 18.03.2020 (Admission for CIRP application order) restored in event of any default of difference.
The Respondent Company defaulted in paying the balance amount, so the Appellant had to free its accounts and approach the Adjudicating Authority to restore the aforementioned order. However, the Authority directed the Appellant Bank to file a fresh application in this regard and initiate the proceedings from scratch.
Thus, aggrieved by this the Bank came in appeal before the NCLAT.
The Appellate Authority observed that the Adjudicating Authority has overlooked its own order of granting the relief of restoration in case of any default in the payment by the Respondent. It specifically recorded in its order that “We make it clear that in the event of default not adhering to the terms of ‘settlement agreement’ as regards the payment of the outstanding instalments, the ‘Operational Creditor’ shall be at liberty to seek revival/restoration of the ‘Corporate Insolvency Resolution Process’ proceedings before the Adjudicating Authority.”
The Appellate Authority thus came to the conclusion that NCLT was wrong in overlooking its own order and granting the liberty to the Appellant to file a fresh application to initiate CIRP. The Appellate Bank is allowed to proceed to restore the application for initiating CIRP.