Case Note & Summary
The appeal was filed by Inteco Melting and Casting Technologies GMBH against the order dated 20.05.2022 passed by the Adjudicating Authority admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by Respondent No. 2 and 3 against Respondent No. 1 (Corporate Debtor) for a debt of Rs.29,36,840/-. At the preliminary hearing on 26.05.2022, the NCLAT directed the appellant to deposit the entire amount of Rs.29,36,840/- by way of demand draft, and subject to such deposit, the impugned order was stayed. The appellant complied with the deposit. Subsequently, on 06.11.2023, the appellant's counsel submitted instructions to settle the matter by paying the amount shown in the balance sheet of Rs.19,36,840/- to the respondent without prejudice to rights in other proceedings, and sought setting aside of the impugned order. The respondent's counsel, however, insisted on the full amount of Rs.29,36,840/-. On 05.07.2024, the appellant's counsel submitted that the entire amount of Rs.29,36,840/- had been deposited and the respondent was agreeable to receive the amount. The NCLAT noted that the entire debt amount had been deposited and the respondent was agreeable to receive it. Accordingly, the appeal was allowed, the impugned order was set aside, and the Registry was directed to release the deposited amount of Rs.29,36,840/- to the respondent.
Headnote
A) Insolvency and Bankruptcy Code - Section 7 Application - Admission of Application - Settlement - Where the appellant deposited the entire debt amount of Rs.29,36,840/- and the parties agreed to settle, the impugned order admitting the Section 7 application was set aside and the appeal was allowed. (Paras 1-5)
Issue of Consideration
Whether the impugned order admitting the Section 7 application should be set aside when the appellant has deposited the entire debt amount and the parties have agreed to settle.
Final Decision
The appeal is allowed. The impugned order dated 20.05.2022 is set aside. The Registry is directed to release the amount of Rs.29,36,840/- deposited by the appellant to the respondent.
Law Points
- Settlement of debt
- withdrawal of Section 7 application
- deposit of entire debt amount
- setting aside admission order
Case Details
2024 LawText (NCLAT) (01) 32
Comp. App. (AT) (Ins) No. 600 of 2022 & I.A. No. 1621, 1622, 1623 of 2022
Mr. K. Datta, Sr. Adv. with Mr. Parul Kashyap, Anuj P. Agarwala, Niharika Kashyap, Adv. for Appellant; Mr. Anjuman Tripathy, Mr. Saurabh Arora, Mr. Chandra Vardhan, Ms. Arohi Chandra, Adv. for Respondent
Inteco Melting and Casting Technologies GMBH
Inteco Special Melting Techonolgies (India) Pvt. Ltd. & Ors
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Nature of Litigation
Appeal against order admitting Section 7 application for Corporate Insolvency Resolution Process
Remedy Sought
Setting aside of the impugned order dated 20.05.2022 admitting the Section 7 application
Filing Reason
The appellant challenged the admission of the Section 7 application filed by Respondent No. 2 and 3 against Respondent No. 1 for a debt of Rs.29,36,840/-
Previous Decisions
The Adjudicating Authority admitted the Section 7 application on 20.05.2022; the NCLAT stayed the order on 26.05.2022 subject to deposit of the entire amount
Issues
Whether the impugned order admitting the Section 7 application should be set aside when the appellant has deposited the entire debt amount and the parties have agreed to settle.
Submissions/Arguments
Appellant submitted that the entire amount of Rs.29,36,840/- has been deposited and the respondent is agreeable to receive the amount.
Respondent's counsel submitted that the amount involved is Rs.29,36,840/- and the respondent is agreeable to receive the amount.
Ratio Decidendi
Where the entire debt amount has been deposited by the appellant and the respondent is agreeable to receive the amount, the impugned order admitting the Section 7 application is liable to be set aside and the appeal allowed.
Judgment Excerpts
This appeal is directed against the order dated 20.05.2022 by which an application filed under Section 7 of the Code by Respondent No. 2 and 3 against Respondent No. 1 for the resolution of their debt has been admitted.
The appeal is allowed. The impugned order dated 20.05.2022 is set aside.
The Registry is directed to release the amount of Rs.29,36,840/- deposited by the appellant to the respondent.
Procedural History
The Adjudicating Authority admitted the Section 7 application on 20.05.2022. The appellant filed an appeal before NCLAT on 26.05.2022, which stayed the impugned order subject to deposit of the entire debt amount. The appellant deposited Rs.29,36,840/-. On 06.11.2023, the appellant offered to pay Rs.19,36,840/- as per balance sheet, but the respondent insisted on full amount. On 05.07.2024, the appellant confirmed deposit of full amount and respondent agreed to receive it. The NCLAT allowed the appeal and set aside the impugned order.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 7
