Case Note & Summary
The dispute arose from proceedings initiated by the Bank of Baroda as a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, which were dismissed by the Adjudicating Authority on 16.07.2024. The appellant filed a company appeal against this dismissal. During the proceedings, the respondent appeared only once and did not participate further. The appellant indicated that a settlement process was underway and agreed to file a memorandum of settlement by 31.03.2026. On 02.04.2026, the appellant reported that a settlement had been reached, with part payments made and a balance due by 15.06.2026. On 22.06.2026, the appellant confirmed that a settlement was entered into on 17.04.2026, with a final payment deadline of 30.09.2026. The appellant was directed to place the settlement on record, which included terms for payment of ₹38.54 crores along with interest. The appeal was ultimately closed based on this settlement, with a condition that the proceedings could be revived if the respondent failed to comply with the payment terms. The court emphasized the importance of adherence to the settlement agreement for the closure to remain effective.
Headnote
A) Insolvency and Bankruptcy - Company Appeal Closure - Settlement Agreement - Insolvency and Bankruptcy Code, 2016, Section 7 - The appeal was closed as the parties reached a settlement, with the respondent agreeing to pay the remaining amount by 30.09.2026. The court held that the closure was subject to compliance with the settlement terms, allowing revival of proceedings if the respondent failed to comply (Paras 8-9).
Issue of Consideration
Whether the company appeal should be closed based on the settlement agreement between the parties.
Final Decision
The company appeal was closed based on the settlement agreement, with a condition that it could be revived if the respondent failed to comply with the payment terms.
Law Points
- Insolvency proceedings
- One-Time Settlement
- Compliance with settlement terms
