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of <h1>Tribunal Orders Settlement Proposal for Company Petition, Emphasizes Prompt Resolution</h1> <h3>State Bank of India, Versus Rohit Ferro Tech Limited,</h3> State Bank of India, Versus Rohit Ferro Tech Limited, - TMI Issues:1. Admission of Company Petition under section 7 of IBC, 2016 as per NCLAT directions.2. Maintainability of petition under section 7 of IBC, 2016 due to SARFAESI Act notice.3. Proposal of composite scheme of arrangement under Companies Act, 2013.Issue 1: Admission of Company Petition under section 7 of IBC, 2016 as per NCLAT directions:The Tribunal considered an application seeking admission of a Company Petition under section 7 of IBC, 2016 in accordance with NCLAT's directions. The Financial Creditor contended that there was an undisputed debt with a default, and the Corporate Debtor had no defense. However, the Corporate Debtor argued that a notice under SARFAESI Act indicated the Financial Creditor's intention for recovery, not resolution. The Tribunal noted that the matter needed swift resolution or else the Corporate Debtor would be put under CIRP. Despite the NCLAT's direction to admit the application under section 7, no settlement proposal had been effectively made, prompting the Tribunal to order the parties to produce documents regarding settlement proposals.Issue 2: Maintainability of petition under section 7 of IBC, 2016 due to SARFAESI Act notice:The Financial Creditor argued that the SARFAESI Act proceedings were independent and did not impact the IBC petition's maintainability. They highlighted that the notice under SARFAESI Act would become void if the Corporate Debtor was admitted under CIRP. Conversely, the Corporate Debtor contended that the notice indicated a focus on recovery rather than resolution, and a scheme of arrangement had been proposed. The Tribunal emphasized the need for the matter to be settled promptly or else the Corporate Debtor would enter CIRP.Issue 3: Proposal of composite scheme of arrangement under Companies Act, 2013:Another application involved a composite scheme of arrangement under sections 230-231 of the Companies Act, 2013. The Corporate Debtor expressed intent to make arrangements with creditors to facilitate smooth business operations post-debt payment as per the proposed scheme. However, the Financial Creditor argued that the scheme's terms were unfavorable and the promised amount was insignificant compared to the outstanding debt. The Tribunal directed the Corporate Debtor to convene a meeting of creditors within four weeks to approve the scheme; failure to obtain approval would result in the Corporate Debtor being admitted into CIRP.In conclusion, the Tribunal emphasized the need for swift resolution, directing the parties to produce settlement proposal documents and convene a creditors' meeting for scheme approval. The Tribunal's decision aimed to ensure efficient settlement or admission into CIRP based on the parties' actions within the specified timeframe.
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