2020 (5) TMI 322 - AT - Insolvency and Bankruptcy

Admissibility of application - pendency of the arbitration proceedings - appellant ready to pay all dues - HELD THAT - As per the terms of settlement, both the parties agreed to share the cost and fee of the interim resolution professional . Learned counsel for the parties state that cost and fee of interim resolution professional has already been paid, which is also accepted by learned counsel appearing on behalf of the interim resolution professional . In the facts and circumstances and in exercise of inherent powers conferred upon this Appellate Tribunal under rule 11 of the National Company Law Appellate Tribunal Rules, 2016, we accept the terms of settlement and set aside the impugned order dated September 3, 2019 and release the corporate debtor from rigour of corporate insolvency resolution process . The interim resolution professional will handover the assets and records to the corporate debtor / promoter - the order passed by the learned Adjudicating Authority appointing interim resolution professional , declaring moratorium and all other order(s) passed by the Adjudicating Authority pursuant to impugned order and action taken by the resolution professional are set aside. Appeal allowed.

Summary

Issues:
1. Application under section 9 of the Insolvency and Bankruptcy Code, 2016 filed by the operational creditor against the corporate debtor.
2. Settlement agreement reached between the parties during the pendency of the appeal.
3. Acceptance of the terms of settlement by the National Company Law Appellate Tribunal and its implications on the corporate insolvency resolution process.

Analysis:
1. The case involved an application under section 9 of the Insolvency and Bankruptcy Code, 2016 filed by the operational creditor against the corporate debtor. The National Company Law Tribunal had admitted the application, leading to the filing of an appeal by the director/shareholder of the corporate debtor. During the proceedings, it was revealed that a settlement had been reached between the parties, resulting in the payment of the total claimed amount by demand draft amounting to &8377; 53,40,453. The terms of settlement included withdrawal of the petition and sharing of costs and fees of the interim resolution professional.

2. The settlement agreement detailed the mutual agreement between the parties, specifying the payment made by the first party to the second party and the subsequent withdrawal of the petition admitted by the National Company Law Tribunal. Both parties agreed to file for withdrawal of the corporate insolvency resolution process and to make a joint statement before the Appellate Tribunal. The agreement also addressed the sharing of CIRP costs and IRP fees, binding both parties and their successors.

3. The National Company Law Appellate Tribunal accepted the terms of settlement and set aside the impugned order dated September 3, 2019. Consequently, the corporate debtor was released from the corporate insolvency resolution process, and the interim resolution professional was directed to hand over assets and records to the corporate debtor/promoter. All orders passed by the Adjudicating Authority were set aside, and the respondent's application under section 9 of the IBC was disposed of as withdrawn, allowing the company to function independently through its board of directors immediately.

This comprehensive analysis outlines the key legal proceedings, the settlement agreement, and the final decision of the National Company Law Appellate Tribunal regarding the corporate insolvency resolution process.