Case Note & Summary
The dispute arose from a development agreement between the Corporate Debtor and Respondent No. 1, which included a refundable deposit of Rs. 5,00,00,000. Following the termination of the agreement by Respondent No. 1, a Company Petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming a financial debt of Rs. 8,55,87,895. During the proceedings, the Corporate Debtor made payments totaling Rs. 5,40,00,000. Subsequently, a settlement agreement was reached, wherein the appellant agreed to pay Rs. 10,51,16,338 for full and final settlement. The appellant made a payment of Rs. 9,00,00,000, which was accepted by Respondent No. 1, leading to an amendment of the settlement amount. The appellant then sought to set aside the CIRP, supported by affidavits from other creditors expressing no objection to the withdrawal of the CIRP. The Interim Resolution Professional (IRP) also indicated no objection to closing the CIRP. The Tribunal referenced a precedent where a similar settlement led to the closure of the CIRP. Ultimately, the Tribunal decided to set aside the CIRP based on the settlement and the lack of claims from other creditors, thus disposing of the appeal and pending applications.
Headnote
A) Insolvency Law - Corporate Insolvency Resolution Process - Setting Aside of CIRP - Insolvency and Bankruptcy Code, 2016, Section 7 - The appellant sought to quash the Corporate Insolvency Resolution Process initiated against the Corporate Debtor following a settlement agreement with the respondent. The Tribunal held that since the entire settlement amount was paid and all creditors had no objection, the CIRP was set aside (Paras 15-17).
Issue of Consideration
Whether the Corporate Insolvency Resolution Process should be set aside based on the settlement between the parties.
Final Decision
The Tribunal set aside the Corporate Insolvency Resolution Process against the Corporate Debtor based on the settlement agreement and the lack of objections from creditors, thus disposing of the appeal and pending applications.
Law Points
- Corporate Insolvency Resolution Process
- Settlement Agreement
- Financial Debt
- No Objection from Creditors
