2019 (11) TMI 1577 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of application - issue has been settled between the parties - Maintainability of application - initiation of CIRP - HELD THAT - Since the Company Petition is not yet admitted by the Adjudicating Authority, and the parities themselves have settled the issue, we are inclined to permit the Petitioner to withdraw the instant Company Petition subject to honouring the cheques as mentioned in the Joint Memo dated 18-11-2019, by reserving liberty to the Petitioner to file fresh Company Petition in accordance with law, in the event the Respondent is failed to honouring any of the abovementioned cheques as mentioned in the said Joint Memo. Petition disposed of as withdrawn by directing the Respondent to strictly adhere to the payment schedule as mentioned in the Joint Memo dated 18-11-2019 without fail, failing which the Petitioner is at liberty to file fresh Company Petition in accordance with law.

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process under IBC, 2016, based on default amounting to ?16,11,097/- by the Operational Creditor against the Corporate Debtor.

Detailed Analysis:

Issue 1: Initiation of CIRP
The case involved C.P.(IB) No.202/BB/2019 filed by the Operational Creditor seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016. The default amount in question was ?16,11,097/-, including principal and interest. The case underwent multiple listing dates for admission, with adjournments granted upon parties' requests to settle the matter.

Issue 2: Settlement Agreement
Both parties, through their learned Counsels, filed a Joint Memo on 18-11-2019, proposing a settlement. The Respondent agreed to pay ?11,86,356/- as a full and final settlement to the Petitioner. The settlement included issuing two cheques and reimbursing an additional sum. The parties mutually agreed to settle the matter out of court, with a provision for the Petitioner to revive the petition in case of default by the Respondent.

Issue 3: Withdrawal of Company Petition
Following the settlement agreement, the Petitioner sought to withdraw the Company Petition, subject to the Respondent honoring the cheques as per the Joint Memo. The Respondent confirmed their commitment to fulfilling the terms of the settlement. As the Company Petition was not admitted by the Adjudicating Authority and the parties had resolved the issue themselves, the Tribunal permitted the withdrawal of the petition. The Petitioner was granted liberty to file a fresh Company Petition if the Respondent failed to honor the agreed cheques.

Conclusion:
The Tribunal disposed of C.P. (IB) No. 202/BB/2019 as withdrawn, directing the Respondent to adhere strictly to the payment schedule outlined in the Joint Memo. The Petitioner retained the right to file a new Company Petition if the Respondent defaulted on the agreed payments. The judgment emphasized the importance of honoring the settlement terms and did not impose any costs in this matter.