Case Law Details
K Parthiban Rasu Vs Umiya Development Centre India Pvt. Ltd. & 2 Ors. (NCLAT Chennai)
Introduction: The recent case between K Parthiban Rasu, Umiya Development Centre India Pvt. Ltd., and the State Bank of India (SBI) heard at the National Company Law Appellate Tribunal (NCLAT) in Chennai has brought attention to some pressing issues in insolvency and corporate law. In essence, the case addresses the validity of a Memorandum of Compromise (MOU) and the role of the State Bank of India as a Financial Creditor.
Role of State Bank of India: SBI, being the sole Financial Creditor in the case, filed an application seeking to continue the Corporate Insolvency Resolution Process (CIRP). The Tribunal ruled in favor of SBI, stating that the absence of a valid Form FA severely affected SBI’s interests.
The Memorandum of Compromise: The MOU signed on 16.12.2021 between the Operational Creditor (Umiya Development) and the Corporate Debtor was scrutinized for its validity. Harsan Kumar, who signed the MOU, was found to have resigned two months prior, rendering the MOU invalid.
Interplay of Court Orders: The Appellate Authority gave multiple extensions to the appeal filed by Parthiban Rasu K, which later was withdrawn due to a settlement. Despite this, no proper application was filed to proceed with the resolution, which played a role in the court’s final decision.
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