Case Note & Summary
The case involved Axis Bank Ltd. as the Financial Creditor seeking restoration of Company Appeal (AT) (Ins.) No. 463 of 2024 after the Corporate Debtor, M/s. Chintamani's Jewellery Arcade Private Limited, failed to adhere to consent terms established in a prior settlement. The Financial Creditor had initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, due to defaults in payment by the Corporate Debtor. Following the admission of the insolvency petition, a settlement was reached, and the appeal was disposed of with a provision allowing revival in case of default. However, the Corporate Debtor defaulted on payments, prompting the Financial Creditor to file for restoration of the appeal. The Tribunal analyzed the circumstances surrounding the defaults and the obligations under the consent terms, ultimately determining that the defaults were substantial and ongoing. The Tribunal emphasized that the restoration was warranted to protect the interests of the Financial Creditor and ensure compliance with the settlement. The appeal was restored, and the insolvency proceedings were revived, highlighting the importance of adherence to court-recorded agreements.
Headnote
A) Insolvency Law - Restoration of Appeal - Grounds for Restoration - Insolvency and Bankruptcy Code, 2016 - The Tribunal found sufficient grounds for restoring the appeal due to a material breach of consent terms by the Corporate Debtor, which justified invoking the liberty reserved in the previous order. The appeal was restored to ensure compliance with the settlement terms (Paras 35-36).
Issue of Consideration
Whether the Applicant has made out a case for restoration of Company Appeal (AT) (Ins.) No. 463 of 2024 and consequential revival of the proceedings.
Final Decision
The Tribunal recalled the order dated 09.05.2024, restored Company Appeal (AT) (Ins.) No. 463 of 2024, and revived the CIRP proceedings against the Corporate Debtor in CP (IB) No. 508/MB/2023 due to substantial and continuing defaults by the Respondents.
Law Points
- Restoration of appeal
- Insolvency proceedings
- Breach of consent terms
- NCLAT Rules
- 2016
Case Details
2026 LawText (NCLAT) (06) 57
Restoration Application No. 6 of 2025 in Company Appeal (AT) (Ins.) No. 463 of 2024
Indevar Pandey, Arun Baroka, Justice N. Seshasayee
Ms. Bandana Kaur Grover, Mr. Akash Chatterjee, Mr. Arvind Nayar, Mr. Shivam Chanana, Mr. Akshay Joshi
M/s. Chintamani's Jewellery Arcade Private Limited, Mr. Chintamani Kaigaonkar
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Nature of Litigation
Restoration application following a breach of consent terms in insolvency proceedings.
Remedy Sought
Axis Bank Ltd. sought restoration of Company Appeal (AT) (Ins.) No. 463 of 2024.
Filing Reason
The Corporate Debtor failed to adhere to the consent terms established in a prior settlement.
Previous Decisions
The appeal was previously disposed of based on the consent terms on 09.05.2024.
Issues
Whether the Applicant has made out a case for restoration of the appeal
Whether the defaults by the Corporate Debtor justify revival of insolvency proceedings
Submissions/Arguments
The Applicant argued that the Corporate Debtor breached the consent terms, justifying restoration.
The Respondent contended that efforts were made to settle the dues and that the restoration was unwarranted.
Ratio Decidendi
The Tribunal held that substantial and continuing defaults under the consent terms justified the restoration of the appeal and revival of insolvency proceedings, emphasizing the importance of compliance with court-recorded agreements.
Judgment Excerpts
The disposal of the appeal was not unconditional, but was founded upon faithful compliance with the settlement terms by the Respondents.
The breach is neither technical nor insignificant but substantial and continuing.
Procedural History
The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 on 28.04.2023, which was admitted on 23.02.2024. An appeal was filed against this admission, which was disposed of on 09.05.2024 based on consent terms. The current restoration application was filed due to defaults in the consent terms.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 7
- NCLAT Rules, 2016: Rule 11
- Recovery of Debts and Bankruptcy Act, 1993:
- SARFAESI Act, 2002:
