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CIRP can be resumed on failure of OTS

Citation : M/s. ICICIBankLimited vs OPTO Circuits (India) Limited, Company Appeal (AT) (CH) (Insolvency) No. 146 of 2021

Date of Judgment/Order : 28th April,2022

Court/Tribunal : National Company Law Appellate Tribunal, Chennai Bench

Corum : Justice M. Venugopal, Member (Judicial) & Kanthi Narahari, Member (Technical)

Background

The Petitioner had filed a Corporate Insolvency Resolution Process (CIRP) against the Respondent before NCLT, Bengaluru. Subsequently, they agreed to a One time settlement offer. However, the Petitioner prayed before the NCLT permission to resume/revive the CIRP in the event of failure of the OTS. However, the NCLT refused and observed that the Appellant Bank is only entitled to file fresh Company Petition. This appeal was filed against said order.

Judgment

The NCLAT referred to its earlier judgment in Vivek Bansal vs. Burda Druck India Pvt. Ltd., CA (AT) (Ins) No. 552 of 2020, wherein it has been specifically held as under:

“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 NCLAT terming the decision of the NCLT as erroneous, observed that the NCLT should have taken note of the judgment mentioned above particularly when it was brought to its notice by the Appellant and also have been affirmed by the Respondent is their prayer.

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