One Page # 12 – In the matter of Akshay Arun Shetty V Bank of India

One Page # 12 – In the matter of Akshay Arun Shetty V Bank of India
Waiver given on Interest in OTS Proposal due to Pandemic Situation
Court:  NCLT Mumbai & NCLAT Chairman Bench AT# 277/2020 Dt 05.01.2021

1. Facts of the Case:

1. Outstanding liability of Rs.9.08 Crores payable by 21.08.2020 in terms of OTS approval has been paid (Rs.8.51 Cr on 9.11.2020 & Rs.57 lakhs on 01.01.2021) by the Appellant to the Respondent Bank
2. Appellant was under legal obligation to clear the debt by 21.08.2020 and is liable to pay interest at the rate of 1% above base rate per annum simple on reducing balance from the date of approval of OTS; in case of delay in payment along with the CIRP costs and the counsel fee.  
3. Respondent Bank’s averment is that though the liability has been cleared in terms of OTS proposal, Appellant is bound to pay interest.
4. Appellant requests for waiver on interest component on account of the hardship due to outbreak of Covid19.  

2. Discussions by NCLAT:

a. It is an admitted position that the amount sought to be paid by the Appellant to the Bank in terms of compromise offer manifesting OTS proposal has been cleared.

b. Ensuing the disruption of economic activities and operations, relaxation was given by NCLAT in terms of settlement by extending the time upto 31.12.2020. Balance amount Rs.57 lakh was paid by the Appellant the very following date ie 01.01.2021

c. In these circumstances, it is meaningless if the Appellant is saddled with the liability of paying the interest as approved in OTS proposal. So NCLAT waives imposition of interest for mitigating the hardship arising out of imposition of lockdown and slowdown of economic activities

d. So far as CIRP costs and counsel fee are concerned, in absence of any specific provision in the approved OTS approval, this Appellate Tribunal is not inclined to pass any order in regard to the same.

3. Judgment:

a. Company Petition pending before NCLAT Mumbai shall stand closed.

b. CD shall stand released from rigor of CIRP and IRP shall be relieved of his duties.

c. NCLT is at a liberty to pass appropriate order in regard to CIRP costs and fees as deemed fit.

–MS Mano Ranjani