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 would withdraw the proceedings. However, due to procedural defects, the MoU could not be presented to the Adjudicating Authority in time. The appellant argued that since there was no dispute remaining, the Adjudicating Authority should not have passed the impugned order. The parties jointly acknowledged the settlement and requested the court to allow them to approach the Adjudicating Authority for withdrawal of the proceedings under Section 12A of the Code. The court noted that the application for withdrawal was eventually presented and that the Adjudicating Authority had taken cognizance of it. The court disposed of the appeal, allowing the parties to pursue their grievance before the Adjudicating Authority and granting liberty to the respondent to file an application for withdrawal of the CIRP proceedings. The interim order issued by the court was to remain in effect until the final disposal of the application before the Adjudicating Authority.
Headnote
A) Insolvency Law - Amicable Settlement - Effect of Settlement on Proceedings - Insolvency and Bankruptcy Code, 2016, Section 9 - The parties had reached an amicable settlement before the impugned order was passed, which should have been considered by the Adjudicating Authority. The court held that the parties may pursue their grievance before the Adjudicating Authority in light of the settlement (Paras 11-12).
Issue of Consideration
Whether the impugned order should be set aside due to the amicable settlement between the parties.
Final Decision
The appeal was disposed of, allowing the parties to pursue their grievance before the Adjudicating Authority and granting liberty to the respondent to file an application for withdrawal of the CIRP proceedings.
Law Points
- Insolvency proceedings
- amicable settlement
- withdrawal of proceedings
- CIRP Regulations
- inherent powers of NCLT
