Mandava Holding Pvt. Ltd. Vs PTC India Financial Services Limited (Telangana High Court)
Telangana High Court held that sole financial creditor cannot entertain request of One Time Settlement once corporate debtor enters in Corporate Insolvency Resolution Process (CIRP). Accordingly, petition dismissed.
Facts- The petitioner prays for a writ of Mandamus on the respondent No.1 with regard to a letter dated 30.10.2023 rejecting the petitioner’s One Time Settlement (OTS) Proposal dated 17.10.2023. The petitioner is the promoter of the Insolvent Entity/NSL Nagapatnam Power and Infratech Limited (NNPIL) which is presently in CIRP. The cause of action in the writ petition is respondent No. 1’s rejection of the petitioner’s OTS without following the Reserve Bank of India Framework for Compromise Settlements and Technical Write-offs dated 08.06.2023 (RBI Framework).
Conclusion- Held that the petitioner is not entitled to the relief prayed for under Article 226 of the Constitution of India. The petitioner should have taken recourse to the provisions of the IBC and approached the NCLT for appropriate relief. The writ petition is also not maintainable in view of the efficacious statutory remedy under section 60(5) of the IBC which is a comprehensive Code envisaging all possible scenarios and modes of redress within the four corners of the IBC. The first respondent, as the sole Financial Creditor, is also divested of powers to entertain an OTS once the CIRP of the Corporate Debtor is set in motion. The power to withdraw the applications under section 12A of the IBC post-admission must also be subject to the approval of the CoC in the manner prescribed in the said provision.
