2021 (4) TMI 1358 - AT - Insolvency and Bankruptcy

Rejection of recall of order - Application filed under Section 7 of IBC withdrawn by the Appellant - Adjudicating Authority had ignored CoC formed after settlement was informed to IRP - HELD THAT - It is difficult to take a different view from the Adjudicating Authority. There is difference between withdrawal simplicitor making statement that parties have settled. It is different when bringing the settlement on record, and making it a part of the Order of withdrawal liberty is taken and brought on record to restore the proceedings in case of default. IBC is not a recovery proceeding where because the money or part of it has not come, the party may repeatedly come to the Court. Adjudicating Authority has rightly observed that no liberty to revive was there and so declined to interfere. The Appellant would be at liberty to pursue other remedies in law. There are no substance in the Appeal to entertain the Appeal - The Appeal is dismissed.

Summary

Issues:
Appeal against the Impugned Order dated 26th February, 2021 rejecting the Application to recall the Orders passed by the Adjudicating Authority in a previous case under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC).

Analysis:
1. The Appellant filed an Application under Section 7 of IBC against the Corporate Debtor, which was later withdrawn due to a compromise between the parties. The Adjudicating Authority rejected the Application to recall the Orders passed during the case, stating that no liberty was given to the Petitioner to revive the application after the settlement outside the Tribunal. The Adjudicating Authority held that since it was not part of the settlement, the earlier order could not be recalled, and the Application was dismissed.

2. The Appellant argued that the Corporate Debtor violated the terms of the settlement by not honoring several cheques as per the Settlement Deed. The Application to recall the Orders was based on this violation. However, the Adjudicating Authority found that bringing the settlement on record and making it part of the Order of withdrawal would have allowed for revival in case of default, which was not done in this case. The Authority emphasized that IBC is not a recovery proceeding where parties can repeatedly approach the Court for non-payment issues.

3. The Impugned Order of 26th February, 2021, which was challenged in the Appeal, was upheld by the National Company Law Appellate Tribunal. The Tribunal concurred with the Adjudicating Authority's decision, stating that no valid reason was presented to recall the earlier order. The Tribunal emphasized that the Appellant could pursue other legal remedies but found no merit in the Appeal, ultimately dismissing it.

In conclusion, the Appellate Tribunal upheld the decision of the Adjudicating Authority to reject the Application to recall the Orders passed in the case under IBC Section 7. The Tribunal found that the settlement terms were not properly recorded to allow for revival in case of default, leading to the dismissal of the Appeal.