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2020 (7) TMI 833 - AT - Insolvency and BankruptcyRecording of settlement arrived at between the parties - Rule 11 of the National Company Law Appellate Tribunal Rules 2016 - parties have amicably settled the dispute and the Corporate Debtor has agreed to accept the amount towards full and final settlement of all claims - HELD THAT - As the parties have reached the settlement and the Committee of Creditors was not constituted in exercise of powers conferred under Rule 11 of the NCLAT Rules 2016 the impugned order dated 27th May 2020 is set aside and exit from the corporate insolvency resolution process which is permissible in terms of the verdict of the Hon ble Apex Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT is allowed. The matter is accordingly disposed of in terms of the Settlement Agreement between the parties. In effect order (s) passed by Ld. Adjudicating Authority appointing Interim Resolution Professional declaring moratorium and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action taken by the Resolution Professional are set aside. Appeal disposed off.
Issues: Settlement agreement between parties, setting aside impugned order, exit from corporate insolvency resolution process, fee and expenses of Resolution Professional, consequences of default on settlement agreement
The judgment delivered by the National Company Law Appellate Tribunal, New Delhi involved the consideration of an application filed by the Appellant for recording a settlement agreement between the parties. The corporate insolvency resolution process was initiated by the Respondent, an Operational Creditor, leading to the appointment of an Interim Resolution Professional. However, the parties reached an amicable settlement, with the Corporate Debtor agreeing to pay Rs. 4,25,00,000/- towards full and final settlement of all claims. The Settlement Agreement was duly executed and admitted by the parties, leading to the request to set aside the impugned order. The Tribunal, in exercise of powers under Rule 11 of the NCLAT Rules, 2016, decided to set aside the impugned order dated 27th May, 2020, allowing an exit from the corporate insolvency resolution process as permitted by the Supreme Court's verdict in 'Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors.' The Tribunal further directed the closure of all proceedings related to the matter, releasing the Respondent Company from the constraints of the law to function independently through its Board of Directors immediately. Regarding the fee and expenses of the Resolution Professional, the Tribunal noted an inflated claim and decided to fix the fee and corporate insolvency resolution process cost at a consolidated amount of Rupees Seven Lakhs, to be shared equally by both parties as per the settlement agreement. It was emphasized that any default in adhering to the terms of the Settlement Agreement could lead to the Operational Creditor seeking revival of the corporate insolvency resolution process proceedings. The judgment concluded by disposing of the appeal, with no order as to costs, thereby effectively resolving the issues arising from the settlement agreement, setting aside the impugned order, determining the Resolution Professional's fee, and outlining the consequences of default on the settlement agreement.
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