Case Note & Summary
The case involved an appeal against an order passed by the National Company Law Tribunal (NCLT) initiating the Personal Insolvency Resolution Process against the appellant, Nirmal Singh, based on an application from IndusInd Bank. The NCLT's order was dated 16/03/2026, following an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant contended that a report from the Resolution Professional indicated that the debt was in the settlement stage and did not recommend admission of Personal Insolvency. The appellant had also filed an application for settlement, which was acknowledged by the bank. However, an addendum from the Resolution Professional was submitted without the appellant being served, leading to the impugned order. The appellant argued that this violated natural justice principles. Upon appeal, the Tribunal noted that a settlement had been reached, with the bank confirming that all payments were made and no other claims were pending. The Tribunal concluded that the proceedings against the appellant should not continue and set aside the NCLT's order, thereby closing the Personal Insolvency Resolution Process. The appeal was disposed of accordingly, and the pending applications were also resolved.
Headnote
A) Insolvency Law - Personal Insolvency Resolution Process - Violation of Natural Justice - Insolvency and Bankruptcy Code, 2016, Section 95 - The Tribunal found that the appellant was not given an opportunity to respond to an addendum filed by the Resolution Professional, which violated principles of natural justice. The Tribunal held that the proceedings should be closed as a settlement had been reached between the parties, thus setting aside the impugned order (Paras 5-7).
Issue of Consideration
Whether the impugned order initiating the Personal Insolvency Resolution Process was justified given the settlement between the parties.
Final Decision
The Tribunal set aside the impugned order dated 16/03/2026 and closed the Personal Insolvency Resolution Process against the appellant, noting the settlement between the parties.
Law Points
- Natural justice
- Personal Insolvency
- Settlement
- Insolvency and Bankruptcy Code
- 2016
