Corporation Bank Vs. Amtek Auto Ltd. And Other [CA Nos. 567/2018 & 601/2018 In CP (IB) No.42/Chd/Hry/2017] - Synopsis
Team SoOLEGAL 12 Jan 2021

In this case, Corporation Bank Vs. Amtek Auto Ltd. And Other [CA Nos. 567/2018 & 601/2018 In CP (IB) No.42/Chd/Hry/2017], the instant application was submitted on behalf of the Committee of Creditors pursuant to Section 60(5), read with Section 74(3) of the Insolvency Bankruptcy Code 2016, in order to designate the resolution applicant to whom the resolution agreement is binding pursuant to Section 31 of the Code as disqualified, for intentionally contravening the provisions of the plan and failing to enforce the same. It was also prayed for the restoration of Company of Creditors and that a further 90-day process would be given so that the Resolution Professional could make another effort to settle the matter rather than compel the Corporate Debtor to liquidate. It was also prayed that the resolution applicant be stopped from making an application in a form of a fresh procedure. Earlier, Corporation Bank, as a financial creditor, had filed a petition under Section 7 of the Insolvency Bankruptcy Code 2016, against M/s Amtech Auto Limited for defaulting on payment of unpaid fees. On 24th July, 2017 the petition was approved and also a moratorium was declared under Section 14 of the code and by order dated 27.07.2017, Mr. Dinkar T. Venkatasubramanian was named an Interim Resolution Specialist with the required instructions. During the CIRP, an extension of 90 days was also sought and approved. On 25.07.18, the resolution plan proposed by the claimant was accepted by the Tribunal. However, the Resolution Applicant had failed to honour its commitment.
The National Company Law Tribunal had held that, as a simple default in the execution of the plan within the time limit set out in the Resolution Plan, an urgent appeal should be given to any member of the CoC or Resolution Professional with the right to file a complaint before IBBI or the Central Government with a request to file a criminal complaint on the ground that a deliberate and willful violation has occurred in terms and conditions of the resolution plan. It was noticed from the order authorizing the resolution plan that, out of the two applicants, one of the applicant's highest-value proposals was accepted by CoC. It was also noticed that there were four additional applicants who did not respond to the resolution proposal. The Bench, therefore, held that, in view of the purpose of the Code and the rules laid down by the Hon'ble Supreme Court, in ArcelorMittal India Private Limited Versus Satish Kumar Gupta and Others, Civil Appeal Nos.9402- 9405 of 2018, it was difficult to consider the prayer for the commencement of a fresh procedure for the resolution of the corporate debtor.


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