Case Note & Summary
The appeal was filed against an order dated 05.08.2026 by the National Company Law Tribunal, which initiated Corporate Insolvency Resolution Process (CIRP) against the appellant. The appellant contended that an amicable settlement had been reached between the parties, evidenced by a Memorandum of Understanding (MoU) dated 29.07.2026, which stipulated that the Respondent No. 1 would withdraw the proceedings. However, due to procedural defects, this MoU could not be presented to the Adjudicating Authority in time. The appellant argued that since the dispute was settled, there was no basis for the impugned order. The parties jointly acknowledged the settlement and the subsequent application by Respondent No. 1 to withdraw the proceedings, which was eventually presented to the Adjudicating Authority on 19.08.2026. The court considered the facts and allowed the parties to pursue their grievance before the Adjudicating Authority, providing liberty to the Respondent No. 1 to move for withdrawal of the CIRP proceedings under Section 12A of the Code. The interim order issued by the Tribunal remained in effect until the final disposal of the application IA No. 3840/2026, scheduled for 09.09.2026. The appeal was disposed of accordingly.
Headnote
A) Insolvency Law - Amicable Settlement - Withdrawal of Proceedings - Insolvency and Bankruptcy Code, 2016, Section 9 - The parties had settled their dispute amicably before the impugned order was passed, and the Respondent No. 1 was to withdraw the proceedings. The court held that the parties may pursue their grievance before the Adjudicating Authority and allowed for the withdrawal of proceedings under Section 12A if the opportunity arises (Paras 11-12).
Issue of Consideration
Whether the impugned order should be set aside due to an amicable settlement between the parties.
Final Decision
The appeal was disposed of, allowing the parties to pursue their grievance before the Adjudicating Authority and permitting the Respondent No. 1 to move for withdrawal of the CIRP proceedings under Section 12A if the opportunity arises.
Law Points
- Insolvency proceedings
- amicable settlement
- withdrawal of proceedings
- CIRP Regulations
- inherent powers of NCLT
