2020 (9) TMI 1207 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - share purchase agreement with the Corporate Debtor - existence of debt and dispute or not - HELD THAT - This Tribunal admitted the application appointing Mr. Amier Hamsa Ali Abbas Rawther as the Interim Resolution Professional. Now the Corporate Debtor namely M/s Sree Bhadra Parks and Resorts Limited filed an application under Rule 11 of the NCLT Rules to recall the order passed by this Tribunal and permit them to settle the matter. Along with the application Form FA for withdrawal of Corporate Insolvency Resolution Process has been filed, duly signed by the applicant stating that on 26.8.2020 settlement has been arrived for a total sum of ₹ 2,25,00,000/- as full and final settlement of the entire claim between the Corporate Debtor M/s Sree Bhadra Parks and Resorts Limited. In view of the settlement arrived between the parties by filing Form FA before this Tribunal and that the IRP stated that he has received his fees, the application stands disposed of.

Summary

Issues:
1. Application for Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency & Bankruptcy Code.
2. Settlement agreement between the Financial Creditor and Corporate Debtor.

Analysis:

1. The application was filed by the Financial Creditor seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on a payment of &8377;4,25,32,016.405/-. The Financial Creditor had entered into a share purchase agreement with the Corporate Debtor, where an advance payment was made, and the debt was acknowledged by the Corporate Debtor on various occasions. The Tribunal admitted the application and appointed an Interim Resolution Professional after considering the contentions raised by both parties.

2. Subsequently, the Corporate Debtor filed an application to recall the order passed by the Tribunal and sought permission to settle the matter. A settlement agreement was reached between the parties, where the Corporate Debtor agreed to pay a total sum of &8377;2,25,00,000/- as a full and final settlement. The settlement involved partial payments made on specific dates, with a balance amount to be paid by a certain deadline. It was clarified that failure to comply with the settlement terms would allow the Financial Creditor to file a fresh application for the remaining amount due.

3. The Tribunal noted the settlement agreement and the confirmation that the Interim Resolution Professional had received his fees. Consequently, the Tribunal disposed of the initial application, allowing the Financial Creditor to file a fresh application if the Corporate Debtor failed to adhere to the settlement terms. The Tribunal emphasized that the settlement agreement should be complied with, and the expenses of the Interim Resolution Professional had already been settled.

In conclusion, the Tribunal acknowledged the settlement agreement between the parties, ensuring that the terms were met to avoid further legal action. The judgment highlighted the importance of honoring settlement agreements in insolvency matters and provided the Financial Creditor with the option to pursue legal recourse if the settlement terms were not fulfilled by the Corporate Debtor.