Vikram Bhawanishankar Sharma vs ICICI Bank Ltd. & Anr.

25.02.2025: IA No.922 of 2025 – This application has been filed by the Appellant challenging order of National Company Law Tribunal, Mumbai Bench dated 14.02.204, by which order Section 7 Application filed by the ICICI Bank Ltd. was admitted.

In the Appeal, an interim order was passed on 21.02.2024 recording the statement of the Appellant that Appellant has submitted a proposal to the Financial Creditor for consideration. Interim order was passed on 21.02.2024 was to the following effect:

The interim order passed in the Appeal was extended from time to time. The Appeal ultimately came for consideration on 22.11.2024, on which date Appellant made a statement that Appellant is endeavouring to settle the due of the Financial Creditor. This Tribunal took the view that course open for the Appellant is to take route of 12A of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) through the Interim Resolution Professional (“IRP”), in event of settlement. The Appeal was disposed of 22.11.2024. In paragraph 9, 10 and 11, following was held:

Subsequent to the final disposal of the Appeal on 22.11.2024, the Appellant filed an IA No.8485 of 2024 praying for extension of time granted by order on 22.11.2024. The period was extended for four weeks from 06.12.2024 by order dated 04.12.2024. Appellant/ Applicant again filed an IA No.24 of 2025 seeking extension of time and time was extended till 27.01.2025. Another IA No.615 of 2025 was filed by the Appellant/ Applicant praying for extension of time as allowed by order dated 22.11.2024. This Tribunal while disposing of the said application observed following in paragraphs 4, 5 and 6:

In paragraph 6 of the above order, we have made it clear that “We make it clear that in event, no Application is filed by 12A, CIRP Process against the Corporate Debtor shall commence and proceed in accordance with law. No further Application for extension shall be entertained.” Subsequent to the order dated 29.01.2025, another IA being IA No.922 of 2025 has been filed by the Appellant/ Applicant, in which application, the Applicant has prayed for following directions:

The Appellant’s case in the application is that the terms of the settlement between the Appellant and the ICICI Bank have been finalized. It is submitted that ICICI Bank has issued Amendatory Settlement letter dated 06.01.2025 and 18.01.2025, where Terms of Settlement proposed by the Appellant were significantly and unilaterally modified. The Appellant submits that settlement amount between the parties have already been freezed and finalized and only disagreement between the parties is with regard to terms contained in the Amendatory Sanction Letter that after deposit of the amount and after issuance of written instructions to IRP to file an application for withdrawal of the Company Petition, the amount deposited in the Escrow Account shall be transferred to Collection Account. Referring to the letter dated 18.01.2024 of the ICICI Bank, the Appellant has referred to Clause-e, which is as follows:

The Appellant’s case is that the Appellant has agreed to all Terms of Contract put forth by the ICICI Bank and the Investors of the Appellant have also agreed to the terms and Investors also ready to deposit the amount the amount in the Escrow Account.

The application filed by the Appellant has been opposed by the ICICI Bank and a limited affidavit in reply has been filed. In the affidavit in reply filed on behalf of the ICICI Bank, it has been submitted that in lieu of receiving the settlement amount of Rs.73.84 crores, Respondent No.1 has agreed to release the security and guarantee created by the Corporate Debtor (“CD”) in favour of Respondent No.1. It is submitted that as per Settlement Letter dated 18.12.2024, which provided for payment schedule on or before 31.12.2024, the Appellant has never given his consent, agreeing with the Terms and it was due to Appellant’s own delay that settlement could not fructify. It is pleaded that out of settlement amount and amount of Rs.3.70 crores, i.e. 5% of the settlement amount was handed over to Respondent No.1 on 07.01.2025. It is pleaded that although the Appellant on its own statement, it has agreed with all terms and conditions put forth by Respondent No.1, whereas the Appellant is not counter signing the Settlement Letter, so as to accept the Settlement Proposal. Respondent No.1 opposes the application for extension of any further time. Learned Counsel for Respondent has specifically referred to the order of this Tribunal passed on 29.01.2025 in IA No.615 of 2025, where this Tribunal has observed that “in event, no Application is filed by 12A, CIRP Process against the Corporate Debtor shall commence”. It is submitted that interim order in this Appeal is continuing from 21.02.2024 and a period of one year has elapsed and Appellant has not agreed to all Terms of Settlement. Hence, no application could be filed by the ICICI Bank under Section 12A.

We have heard Shri Abhijeet Sinha, learned Senior Counsel for the Appellant and Shri Niranjan Reddy, learned Senior Counsel for ICICI Bank.

Learned Counsel for the Appellant submitted that the Appellant is ready to deposit the entire balance amount in this Tribunal. He further submits that ICICI Bank condition in the settlement that after depositing all the amount in the Escrow Account by the Appellant, the said amount shall be transferred in the Collection Account, indicate that even before decision is taken on 12A application, ICICI Bank shall appropriate the amount deposited. It is submitted that the amount, which is being brought by Investors, cannot be permitted to be appropriated by ICICI Bank before 12A application is decided.

We have already noticed the letter dated 18.01.2025, which is a Amendatory Settlement Letter, which was issued by ICICI Bank and the Clause-e, existing clause and amended clause, where both the clauses contemplate that on or before the due date, the entire Settlement Amount shall be released from the Fund Escrow Account to the Collection Account of the ICICI Bank. The settlement between the parties can be arrived only when both the parties agrees with all terms and conditions. We while considering IA No.922 of 2025, cannot issue any direction to modify or change the Terms of Settlement as proposed by the ICICI Bank. We have noted above that Appeal was disposed of on 22.11.2024, permitting Financial Creditor to file 12A application within the time allowed, which time was extended from time to time. From the facts brought on record, it is clear that as on date, both the parties have not agreed and signed any Settlement Agreement, so that an application under Section 12A can be filed for withdrawal of the CIRP. We have already noticed the submission of the learned Counsel for the Canara Bank, who has claimed that it has also dues on the Corporate Debtor, who also contends that no further indulgence be granted to the Appellant.

After having heard the submissions of learned Counsel for the parties and taking into consideration the various orders passed in this Appeal and the final order on 22.11.2024 and subsequent orders, extending time for filing 12A application, including order dated 29.01.2025 passed in IA No.615 of 2025, we are of the view that the Appellant is not entitled for any further extension, as prayed in IA No.922 of 2025. In result, IA No.922 of 2025 is rejected. In consequence of rejection of IA No.922 of 2025, as directed on 29.01.2025, CIRP against the Corporate Debtor shall commence and proceeded in accordance with law. IA No.922 of 2025 is dismissed accordingly.