TMI Blog2021 (1) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized upon approval of resolution plan (i.e. one time settlement), however, in any case, it should not be adjusted towards interest/ other charges/ principal till then. The company is committed to bring the balance amount to the extent of 10% as per their commitment once approval is accorded by the lead bank. Before the date of commencement of CIRP, the respondent bank has not adjusted this amount in the loan account of the corporate debtor, whereas it has kept the same in a separate account as instructed by the corporate debtor. It shows that the bank has agreed for no lien to this amount till OTS proposal is approved by the bank. Hence, on initiation of CIRP, the amount kept in a separate account as 'No Lien Account' by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheque No.591269 dated 16.07.2017 in the No Lien Account maintained with the respondent, i.e. Bank of India. However, communications were held with the respondent to allow operations in the said account and for release of amount of ₹ 100 lacs for the purpose of CIRP. It is further stated that despite persuasion did not release the said amount and continue to hold the same in an unauthorized manner, in gross violation of the provisions of I B Code. 5. It is further stated that in the 3rd meeting of the CoC, held on 08.09.2020, this issue was discussed at length, however, no decision in the matter could be taken as the respondent was not present in the meeting. 6. It is further stated that the respondent-Bank of India has alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions (including the Respondent) through their letter dated July 12, 2017 (Offer Letter). The proposal provided in the Offer Letter was for a one-time settlement of all dues of the corporate debtor qua the secured financial institutions, by paying an amount equivalent to 50% of the outstanding dues as on the date of NPA within 4 years (OTS Amount). Secured financial institutions had also asked for an upfront payment of 5% of OTS amount and subsequently on approval another 5% immediately. 10.3 However, to show their bona-fide, the Offer Letter the corporate debtor had also enclosed a cheque for an amount of INR 1,00,00,000 (Indian Rupees One Crore only), bearing Cheque No. 591269, dated July 16, 2017. This was in pursuance to the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Realcon on behalf of the Corporate Debtor. Therefore, it is clearly not an asset of the Corporate Debtor and does not in any way come under the purview of section 18(f). 10.6 Without prejudice to the above submissions, assuming though not admitting that it was an amount paid by the Corporate Debtor, I submit as follows: a. The amount of one crore was paid for showing the bona-fides of the Corporate Debtor, in pursuance to a settlement proposal. This one crore amount was absolutely delinked from the remainder of the proposal and was supposed to be put into a 'no lien account. Unlike a savings bank account or a current account, a 'no lien account' is not an account of the Corporate Debtor. It is important to highlight tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in possession of the Corporate Debtor and in pursuance to the settlement proposal, as also captured in the Offer Letter, i.e. in pursuance to a contractual arrangement, owned by the Respondent. c. Additionally, it is humbly submitted that at no point of time is there any indication of this one crore amount to be refunded to the Corporate Debtor. There is a clear stipulation of a consequence of the settlement proposal not being accepted, however, such stipulation does not envisage refund of this amount of money. Therefore, it does not envisage the fact that in case the settlement proposal is not accepted that it would be deemed to be an asset of the Corporate Debtor and would have to be refunded. 11. Gone through the application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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