Settlement approved for Corporate Debtor & ICICI Bank, emphasizes timely payments and viable resolutions.

The National Company Law Tribunal, Allahabad Bench, approved a settlement between a Corporate Debtor and ICICI Bank, a Financial Creditor, which was endorsed by the Committee of Creditors. The settlement involved upfront and subsequent payments within a specified timeframe. The Tribunal emphasized the importance of seeking viable resolutions to maintain the Corporate Debtor as a going concern. Relying on legal provisions and judicial precedents, the Tribunal allowed the settlement application, withdrew the liquidation application, and directed timely payments by the CoC, concluding the matter before the Tribunal.

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Issues:
Settlement between Corporate Debtor and Financial Creditor, Approval of settlement by Committee of Creditors, Withdrawal of liquidation application, Recall of Corporate Insolvency Resolution Process (CIRP), Legal position regarding settlement during liquidation process, Judicial precedents on timely completion of Corporate Insolvency Resolution Process.

Analysis:
The judgment by the National Company Law Tribunal, Allahabad Bench, involved various critical issues. Firstly, a settlement was reached between the Corporate Debtor and the Financial Creditor, ICICI Bank, which was approved by the Committee of Creditors (CoC) with 100% majority. The settlement involved an upfront payment and a subsequent payment within a specified timeframe. The CoC requested the withdrawal of the liquidation application and the recall of the ongoing Corporate Insolvency Resolution Process (CIRP) based on the settlement.

The Tribunal considered the settlement offer, emphasizing the objective of the Insolvency and Bankruptcy Code to seek a viable resolution for the Corporate Debtor as a going concern. The Tribunal noted that the CoC's decision to accept the settlement offer was in line with judicial precedents emphasizing the importance of balancing timely completion of the insolvency resolution process and avoiding corporate liquidation.

The Tribunal highlighted the legal provisions allowing for settlements during the liquidation process, particularly Regulation 32 of the IBBI Liquidation Process Regulation, 2016. The judgment referenced the Supreme Court's observation that corporate death should be avoided, and efforts should be made to continue running the corporate debtor as a going concern.

Based on the legal position and judicial precedents, the Tribunal allowed the application for settlement (CA No. 196/2019) and ordered the withdrawal of the liquidation application (CA No. 13/2019). The Tribunal also directed the CoC to make necessary payments within a specified timeframe and declared the moratorium to cease effect.

Additionally, another application seeking direction to consider a resolution plan became infructuous due to the settlement approval. Consequently, all relevant applications (CA No. 124/2019, CA No. 13/2019, and CA No. 196/2019) were disposed of, concluding the matter before the Tribunal.

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