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Judgment
ORDER
Per: Justice Rakesh Kumar Jain:
11/07/2023: This appeal is filed by a suspended director of the Corporate Debtor against the order dated 15.06.2023 passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench – II, Chennai) in CP (IB)/252/CHE/2022 by which an application filed by the Respondent (Bank) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (In short ‘Code’) r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short ‘Rules’) has been admitted.
In brief, the Respondent Bank filed an application under Section 7 of the Code regarding default of Rs. 19,26,88,818.22 /- determined as on 30.04.2022 with further interest at contractual rates w.e.f. 01.05.2022.
It has come on record that the Corporate Debtor despite availing various opportunities did not file the reply and on 31.03.2023, the Court recorded that “despite time given to the Respondent, counter has not been filed”. Thereafter, it is alleged that the Corporate Debtor entered into a One Time Settlement with the Respondent for Rs. 3.50 Crores vide letter dated 16.03.2023 with a pre-condition that the Corporate Debtor shall pay Rs. 70 Lakhs. In this regard, the order passed on 09.05.2023 is reproduced as under:-
“Vide order dated 31.01.2023, last opportunity was granted to the Respondent to file reply/counter. Despite notice, till date, reply/counter has not been filed. Right to file reply/counter accordingly stands closed.
Counsel for the Respondent states that they want to settle the matter, however, due to administrative reasons, talks could not take place.
Counsel for the Applicant states that though OTS proposal was received by the Respondent, but, no amount has been deposited by the Respondent. He further states that the proposal has so far not been rejected.”
It is pertinent to mention that the amount of Rs. 70 Lakhs was also not deposited. Consequently, the Adjudicating Authority found that the debt and default is proved which is more than 1 Crore and accordingly, admitted the application, appointed the IRP and imposed moratorium.
Counsel for the Appellant has argued that the application should not have been admitted by the Adjudicating Authority in view of the fact that the issue regarding OTS was still alive.
We have heard Counsel for the Appellant, perused the record with their able assistance and found that the Appellant, despite various opportunities did not come forward with their reply and ultimately their right to file reply was closed by the Court vide its order dated 09.05.2023. The alleged OTS could not take effect because the Appellant did not comply with pre-condition of the OTS, therefore, it has been found by the Adjudicating Authority that the Appellant was only gaining time, has no intention to settle with the Respondent and has rightly exercised its jurisdiction in regard to the admission of the application filed under Section 7 of the Code by the impugned order in which no error is found for interference. Consequently, we do not find any merit in the present appeal and the same is hereby dismissed. No costs.