TaxTMI 
TaxTMI 
2026 (7) TMI 252
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....the court-recorded Consent Terms dated 27th April 2024 by the Respondents. 2. The brief facts of the case are as given below: i. The applicant, Axis Bank Limited (hereinafter referred to as the 'Financial Creditor'), extended various credit facilities to Respondent No. 1, M/s. Chintamani's Jewellery Arcade Private Limited (hereinafter referred to as the 'Corporate Debtor'), which defaulted in its payments. ii. Aggrieved by the default, subsequently on April 28, 2023, the Financial Creditor filed an application on 28.04.2023 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'Code'), for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate debtor by filing Company Petition [CP (IBC) No. 508/MB/2023] before the National Company Law Tribunal, Mumbai (Adjudicating Authority). iii. The Adjudicating Authority, admitted the Section 7 petition via order dated February 23, 2024. Mr. Prashant Jain was appointed as the Interim Resolution Professional (IRP). iv. Assailing the admission order dated February 23, 2024, Chintamani Arun Kaigaonkar, Suspended Directo....
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....ency) No. 463 of 2024. 3. Ld. Counsel for the Applicant submits that the Respondent No.1/ Corporate Debtor has acted in complete derogation and willful breach of the mutual contract, namely the Consent Terms dated 27th April 2024, which were solemnly executed and placed on record before this Hon'ble Tribunal. He drew attention to the structured repayment matrix, pointing out that out of a total fallen-due commitment of Rs. 3.30 crores spanning between July 2024 and December 2024, the Corporate Debtor has miserably failed to honor its obligations, remitting a meager sum of Rs. 0.70 crores. He submits that even the instalment due on 10th July 2024, amounting to Rs. 0.55 crores, was paid in a highly irregular, piecemeal manner through eight delayed tranches, concluding as late as 14th November 2024. 4. Ld. Counsel further submits that for the subsequent consecutive four months, i.e., from September 2024 to December 2024, there was no payment, resulting in an undisputed principal overdue sum of Rs. 2.60 crores, exclusive of the un-serviced monthly interest. 5. Ld. Counsel argued that the entire conduct of the Respondents post the disposal of the appeal ....
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....nor justified on facts. The Applicant has failed to disclose the complete sequence of events demonstrating the bona fide efforts undertaken by Respondent No. 1 towards settlement of the outstanding dues. 12. Ld. Counsel reiterated that the record reveals that Respondent No. 1 was continuously engaged in arranging funds for liquidation of the outstanding liability. Owing to unavoidable financial constraints and circumstances beyond his control, the payments could not be made within the timelines contemplated by the Applicant. However, mere delay in payment cannot be construed as absence of intention to settle the dues. 13. Ld. Counsel further submits that It is an admitted position that in March 2025, Respondent No. 1 initiated the process of sale of his residential property situated at Blue Ridge, Hinjewadi, Pune, with the sole objective of liquidating the outstanding dues payable to the Applicant Bank. The correspondence exchanged between the parties demonstrates that vide email dated 06.03.2025, Respondent No. 1 informed the Applicant Bank that a prospective purchaser had been identified and that an amount of Rs. 15,00,000/- would be paid immediately as a gesture of commitm....
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....ord to suggest any deliberate avoidance, malafide conduct, or unwillingness to settle the outstanding dues. 19. Ld. Counsel further submits that the Restoration of the appeal and revival of CIRP in the facts of the present case would defeat the very purpose of the settlement process already underway and would cause irreparable prejudice to Respondent No.1, particularly when substantial efforts have been undertaken to generate funds through sale of the mortgaged asset. 20. Ld. Counsel submits that the Applicant has failed to establish any exceptional circumstance warranting exercise of the discretionary jurisdiction of this Hon'ble Appellate Tribunal for restoration of the proceedings. On the contrary, the balance of equities lies in favour of permitting the settlement process to attain fruition. In view of the aforesaid facts and circumstances, this Hon'ble Appellate Tribunal may be pleased to hold that the restoration application is devoid of merit and does not warrant interference. Analysis and findings 21. We have heard the Learned Counsel appearing for the Applicant/Financial Creditor and the Learned Counsel appearing for Respondent No.1/Corporate Debtor. We....
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....d 27.04.2024, 8(b) is extracted below for our convenience. "8. Consent Terms and Undertaking before honorable DRT 8b. The Borrower shall be duly bound to fully co-operate and sign all necessary application affidavits. petitions etc. and make necessary statements for the purpose of withdrawal of Company Appeal No. 463 of 2024 filed before Hon'ble National Company Law Appellate Tribunal, New Delhi (''NCLAT") in terms of present letter, The Bank will file an Application seeking withdrawal of the said Company Petition No. 508(IB)/MB-V/2023 admitted by the Hon'ble National Company Law Tribunal Mumbai Bench {"NCLT"). The Borrower will make a submission before the DRT, NCLT and NCLT acknowledging the acceptance of the present letter and Consent Terms. The Financial Creditor shall be entitled to revive the said Company Petition No. 508/IB (MB) 2023 in the event of any default of the present letter on the part of the Borrower." It is clear from the above consent terms in the letter dated 17.04.2024 which was part of consent terms placed on record before this Tribunal, that if any default was made regarding the above consent terms by the Respondent No.1/C....
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....ready occurred much prior thereto. The issuance of a provisional NOC by the Applicant Bank or its participation in discussions relating to sale of the mortgaged property cannot be construed as a waiver of the earlier defaults or as a relinquishment of the rights expressly reserved under the order dated 09.05.2024. At best, such correspondence demonstrates that the Applicant was willing to explore an amicable resolution despite the defaults committed by the Respondents. 32. The contention that the delay occurred on account of the proposed purchaser and was beyond the control of Respondent No.1 is equally unpersuasive. The obligations under the Consent Terms were personal obligations undertaken by the Respondents before this Tribunal. The failure of a third-party purchaser to complete a proposed transaction cannot dilute or extinguish those obligations. 33. We are also unable to accept the submission that restoration of the appeal would convert the insolvency process into a recovery mechanism. The present proceedings arise not from a fresh invocation of insolvency jurisdiction but from a breach of court-recorded settlement terms pursuant to which the original CIRP admission ord....
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.... Working Capitol Cạnh Cedt /CCI Moins Irrit 17,50 4.30 Tekar (FEWC) 17.50 4.20 WCHI Moin L mit 0.00 8.00 Total Term Loans 0.00 1.00 Grund Total 17.50 12.20 The brief delaih of the moin terms and conditions governing the osall facilities are included tie Amsure encased with the stier. Please note that this it an Interim tetter for Restructuring cum Benewat of credit focflies being addressed to you and hence only the brief detods of the lens and conditions governing the oferesold ficithes are included in this letter The tool letter for Restructuring cum Renewal of oforbid predl facilities oddresing the Compory with delalyd terms and conditions that be provided on after ihs following> · Payment of Its 1.50 Crures toworth upfront amount JAhody received; > » Withorowal al Company Appeal No. 463 al 2024 belde Montole Nasional Company Low Appelait Tilbunce New Duffs |"NCLAT] Subject In the Sortow/Corporate Dettori Party of Second Part that make kbmiplon betont the Hon'pie National Company Low Appelate Tribunal tiew Defi ['NCLAT"]that the Financial Cindpor shesi be erMed to revive the: sodd Peshon No. 50808)-MB-v/2023 apitilted by I've ho....