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Issues: (i) Whether the one-time settlement proposal made by the appellant was accepted by the bank and could support withdrawal of the insolvency process under section 12A; (ii) whether the committee of creditors failed to consider the settlement proposal before approving the resolution plan.
Issue (i): Whether the one-time settlement proposal made by the appellant was accepted by the bank and could support withdrawal of the insolvency process under section 12A.
Analysis: The correspondence showed only that the bank was willing to consider the offer if the full settlement amount was proposed to be paid by the stated date and if the necessary details, source of funds, and payment schedule were furnished. No communication showed an unconditional acceptance or approval of the settlement proposal. In the absence of acceptance by the bank and without a duly filed and approved application for withdrawal, the statutory route under section 12A was not triggered.
Conclusion: The settlement proposal was not accepted by the bank, and no right to seek withdrawal under section 12A had crystallised in favour of the appellant.
Issue (ii): Whether the committee of creditors failed to consider the settlement proposal before approving the resolution plan.
Analysis: The minutes of the committee meeting recorded the suspended board's representation regarding the proposed settlement and show that the proposal was taken into account before the committee decided to continue the corporate insolvency resolution process and proceed to consider the resolution plan. The settlement proposal was therefore not ignored. The decision whether the settlement was preferable to the resolution plan lay within the commercial wisdom of the committee of creditors, which is not open to judicial reappraisal except on limited grounds not made out here.
Conclusion: The committee of creditors did consider the settlement proposal, and its decision to approve the resolution plan was valid.
Final Conclusion: No interference was warranted with the orders rejecting the settlement-based challenge and approving the resolution plan, and the appeals failed.
Ratio Decidendi: A settlement proposal in insolvency proceedings does not displace a resolution plan unless it is actually accepted and the statutory withdrawal mechanism under section 12A is duly satisfied; the committee of creditors' decision on whether to accept such a proposal remains a matter of commercial wisdom not ordinarily subject to judicial review.
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