Case Law Details
Malavika Hegde, Suspended Director of Coffee Day Global Limited Vs IndusInd Bank Ltd. & Anr. (NCLAT Chennai)
Introduction: In a recent development, the National Company Law Appellate Tribunal (NCLAT) Chennai passed a significant order in the case of Malavika Hegde, the suspended Director of Coffee Day Global Limited, versus IndusInd Bank Ltd. and another party. This order revolves around a pivotal ‘Settlement’ that led to the termination of the Corporate Insolvency Resolution Process (CIRP). Let’s delve into the details of this case.
Detailed Analysis: The case, represented by Ld. Sr. Counsel Mr. P.H. Arvindh Pandian on behalf of the Appellant, witnessed a crucial turn when a ‘Joint Memo’ dated 07.09.2023 was filed before the Office of the Registry. This memo revealed that the 1st Respondent, IndusInd Bank, as the ‘Assignor,’ had assigned the ‘Debt’ to ‘ASREC (India Ltd.). This assignment had a profound impact on the ongoing CIRP proceedings between the Appellant and the 1st Respondent.
Both the Appellant’s counsel and the 1st Respondent/Bank jointly requested that the ‘Memo,’ which substantiates the ‘Settlement’ between the parties, be officially recorded. Additionally, they appealed for the termination of the CIRP against the ‘Corporate Debtor,’ ultimately aiming to set aside the Impugned Order dated 20.07.2023 and dismiss the proceedings in CP(IB)No. 132/BB/2022, which were on the file of the Adjudicating Authority/Tribunal.
Crucially, the fact that a ‘settlement’ had been reached between the ‘Appellant’ and the ‘1st Respondent/Bank’ was undisputed. Consequently, the NCLAT Chennai took the ‘memo’ dated 07.09.2023 on record and, based on the settlement, allowed the instant Appeal. This action resulted in the setting aside of the impugned order dated 20.07.2023, passed by the Adjudicating Authority/Tribunal, and the dismissal of the main Company Petition. No costs were imposed, and all connected IA No. 757/2023 (for exemption) and IA No. 758/2023 (for stay) were closed.
Before concluding the case, the ‘Tribunal’ clarified that the 2nd Respondent/IRP (Interim Resolution Professional) was permitted to file a necessary ‘Interlocutory Application’ before the ‘Adjudicating Authority’/ ‘Tribunal’ to claim ‘CIRP costs’ and fees. If such an application is filed, the Adjudicating Authority/Tribunal was obligated to dispose of the application on its merits, providing ‘due opportunities’ to the respective parties.
Conclusion: The NCLAT Chennai’s order in the case of Malavika Hegde vs. IndusInd Bank highlights the importance of settlements in resolving corporate insolvency matters. The ‘Settlement’ in this case led to the termination of the CIRP, providing a resolution to the legal dispute. This case serves as a significant example of how parties can find mutually beneficial solutions to complex financial issues in the corporate world.
FULL TEXT OF THE NCLAT CHENNAI ORDER
It is represented on behalf of the Appellant, through Ld. Sr. Counsel Mr. P.H. Arvindh Pandian and the Ld. Counsel for the 1st Respondent/Bank, that a ‘Joint Memo’ dated 07.09.2023 is filed before the Office of the Registry, and the 1st Respondent being the ‘Assignor’, had assigned that ‘Debt’ in favour of ‘ASREC (India Ltd.)’, the `CIRP’, between the Appellant and the 1st Respondent / Bank be terminated, because of the ‘Settlement’, arrived at between the `Parties’.
2. Furthermore, a request is made jointly, by the Ld. Counsel appearing for the Appellant and the 1st Respondent/Bank that the ‘Memo’, to the factum of ‘settlement’, having been arrived at between the `Parties’, may be taken on ‘Record’ and the ‘CIRP’, against the ‘Corporate Debtor’, be terminated, culminating in the Impugned Order dated 20.07.2023 being set aside, the proceedings in CP(IB)No. 132/BB/2022 (on the file of Adjudicating Authority / Tribunal) be dismissed, eventually.
3. In view of the fact that the ‘settlement’ was arrived at between the ‘Appellant’ and the ‘1st Respondent/Bank’, which is not disputed by the Ld. Counsel for the 1st Respondent/Bank, this Tribunal, takes on Record the ‘memo’ dated 07.09.2023 filed before the ‘Office of Registry of NCLAT’, Chennai and pursuant to the ‘settlement’ being arrived at, this ‘Tribunal’ allows the instant Appeal, by setting aside the impugned order dated 20.07.2023, passed by the Adjudicating Authority / Tribunal in CP(IB)No.132/BB/2022 on the file of ‘NCLT’ Bengaluru Bench and dismisses the main Company Petition. No Costs. All the connected IA No. 757/2023 (for exemption) and IA No. 758/2023 (for stay) are closed.
4. Before parting with the case, this ‘Tribunal’ makes it crystalline clear that the 2nd Respondent / IRP is permitted to file necessary ‘Interlocutory Application’ before the ‘Adjudicating Authority’/’Tribunal’ to lay a claim in respect of `CIRP costs’ and his `Fee’, and if such application is preferred, before the ‘Adjudicating Authority’/’Tribunal’, then, the Adjudicating Authority/Tribunal, shall dispose of the said application, of course on merits, after providing ‘due opportunities’, to the respective `Parties’.
