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2019 (5) TMI 820 - AT - Insolvency and BankruptcyPermission to withdraw application - Non-constitution of Committee of Creditors when the parties reached the settlement - HELD THAT - As the parties have settled the matter prior to constitution of the Committee of Creditors , in the light of the decision of the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT , we allow the prayer as made on behalf of the Respondent to withdraw the application as was filed by him under Section 7. Appeal allowed.
Issues:
1. Maintainability of the appeal by the Corporate Debtor 2. Settlement between the parties before constitution of Committee of Creditors 3. Withdrawal of application under Section 7 of the Insolvency and Bankruptcy Code 4. Release of the Corporate Debtor from the moratorium 5. Payment of fees to the Interim Resolution Professional Issue 1: Maintainability of the appeal by the Corporate Debtor The appeal was filed by the Corporate Debtor against the order of the Adjudicating Authority admitting the application under Section 7 of the Insolvency and Bankruptcy Code. However, it was found that the appeal by the Corporate Debtor was not maintainable as per the decision of the Hon'ble Supreme Court in "Innoventive Industries Ltd. v. ICICI Bank". The appellant sought permission to file an application for substitution by one of the Directors/Shareholders of the Corporate Debtor. Issue 2: Settlement between the parties before constitution of Committee of Creditors The parties settled the matter on 28th February, 2019, before the constitution of the Committee of Creditors. The Terms of Settlement were brought on record, and it was acknowledged that no Committee of Creditors had been constituted at the time of settlement. Issue 3: Withdrawal of application under Section 7 of the Insolvency and Bankruptcy Code As the parties had settled the matter before the constitution of the Committee of Creditors, in line with the decision of the Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.', the Respondent was allowed to withdraw the application filed under Section 7. Consequently, the impugned order admitting the application was set aside, and the application was disposed of as withdrawn. Issue 4: Release of the Corporate Debtor from the moratorium Following the withdrawal of the application under Section 7 and the settlement between the parties, the Corporate Debtor was released from the moratorium. The Adjudicating Authority was directed to close the proceedings, allowing the Corporate Debtor to function independently through its Board of Directors immediately. Issue 5: Payment of fees to the Interim Resolution Professional The Interim Resolution Professional had incurred costs towards the Resolution Process, and the Corporate Debtor was directed to pay the remaining amount within three weeks. Post-dated cheques were to be issued for the payment, ensuring compliance with the Terms of Settlement. Failure to pay within the stipulated time could lead to the revival of the Resolution Process. In conclusion, the appeal was allowed with specific observations and directions, and no costs were imposed.
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