2019 (9) TMI 1596 - AT - Insolvency and Bankruptcy

Constitution of Committee of Creditors - admission of application u/s 9 of the 'I B' Code - HELD THAT - Working for 42 days, we accept the fee of Mr. Anurag Nirbhaya, IRP at ₹ 1,50,000/- for the total period. Therefore, Mr. Anurag Nirbhaya will be entitled to receive a sum of ₹ 2,82,000/- which is to be paid by the Appellant/'Corporate Debtor' within three weeks failing which, it will be open to the IRP to bring the fact to the notice of this Appellate Tribunal for appropriate orders. In view of the settlement reached between the parties in exercise of power conferred under Rule 11 of NCLAT Rules, 2016, the impugned order dated 30th July, 2019 is set aside whereby the 'Corporate Insolvency Resolution Process' was initiated against 'M/s. Nikunj Woods Pvt. Ltd.' ('Corporate Debtor'). The application u/s. 9 of the 'I B' Code filed by 'M/s. Lavis Signature Panel Pvt. Ltd.' stands disposed of as withdrawn. The application preferred by the Respondent under Section 9 of the ''I B Code' is dismissed - appeal allowed.

Summary

Issues: Settlement between parties, Payment of outstanding amount, Fees of Interim Resolution Professional, Setting aside impugned order, Disposal of application under Section 9 of I&B Code, Declaration of orders as illegal, Dismissal of application, Release of Corporate Debtor

In this judgment by the National Company Law Appellate Tribunal, the Appellant submitted that a settlement had been reached with the Respondent, an Operational Creditor. The Corporate Debtor had paid a partial sum just before the admission of the application under Section 9 of the Insolvency and Bankruptcy Code. The remaining amount mentioned in the Demand Notice was paid subsequently. A letter confirming the payment was produced as evidence. The Respondent's counsel confirmed the settlement, noting that the Committee of Creditors had not been constituted. The Interim Resolution Professional acknowledged the non-constitution of the Committee of Creditors and stated the costs incurred, including legal fees. The Tribunal accepted a fee for the Interim Resolution Professional for the period worked and directed the Corporate Debtor to pay the amount within a specified time frame.

Regarding the settlement between the parties, the Tribunal, utilizing Rule 11 of the NCLAT Rules, set aside the impugned order that initiated the Corporate Insolvency Resolution Process against the Corporate Debtor. The application filed under Section 9 of the I&B Code was disposed of as withdrawn. Consequently, all orders issued by the Adjudicating Authority, such as the appointment of the Interim Resolution Professional, declaration of moratorium, freezing of accounts, and other related actions, were declared illegal and set aside. The Respondent's application under Section 9 of the I&B Code was dismissed, and the Adjudicating Authority was directed to close the proceedings. The Corporate Debtor was released from the legal constraints and permitted to operate independently through its Board of Directors with immediate effect.

Ultimately, the appeal was allowed, and the judgment provided a comprehensive resolution to the issues surrounding the settlement, payment obligations, fees of the Interim Resolution Professional, setting aside of orders, dismissal of the application, and the release of the Corporate Debtor from insolvency proceedings.