2020 (6) TMI 594 - AT - Insolvency and Bankruptcy

Maintainability of application - appellant director/ shareholder submits that before constitution of committee of creditors , the parties had reached a terms of settlement on October 10, 2019 - HELD THAT - In view of the fact that the appellant has admitted to the pay the resolution cost and fee of the interim resolution professional, no reply affidavit required to be filed by the interim resolution professional. In view of various developments and as terms of settlement has been reached between the appellant and the financial creditor prior to the constitution of committee of creditors , this Appellate Tribunal in exercise of power conferred by rule 11 of the National Company Law Appellate Tribunal Rules, 2016, set aside the impugned order dated September 19, 2019 - appeal allowed.

Summary

Issues:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 filed by Dalmia Group Holdings against Lokhandwala Infrastructure P. Ltd.
2. Settlement reached between the parties before the constitution of the committee of creditors.
3. Appellant agreeing to pay the admitted fee and cost of the interim resolution professional.

Analysis:
1. The judgment pertains to an application filed under section 7 of the Insolvency and Bankruptcy Code, 2016 by Dalmia Group Holdings against Lokhandwala Infrastructure P. Ltd. The Adjudicating Authority, National Company Law Tribunal, Mumbai Bench, had admitted the application. However, a settlement was reached between the parties before the constitution of the committee of creditors. The appellant director/shareholder, represented by Mr. Arun Kathpalia, submitted that a terms of settlement was reached on October 10, 2019, and the written terms were signed on October 16, 2019, which was accepted by the counsel for Dalmia Group Holdings.

2. The appellant agreed to pay the admitted fee and cost of the interim resolution professional. Despite the appearance of Mr. Vikky Dang, advocate for the interim resolution professional, it was noted that no reply affidavit was required as the appellant had committed to paying the resolution cost and fee. Consequently, the Appellate Tribunal, in exercise of power conferred by rule 11 of the National Company Law Appellate Tribunal Rules, 2016, set aside the impugned order dated September 19, 2019. As a result, the corporate debtor, Lokhandwala Infrastructure P. Ltd., was released from the legal proceedings and allowed to function independently through its board of directors with immediate effect.

3. The judgment concludes by stating that the interim resolution professional will hand over the records and premises of the corporate debtor upon receiving the fee and cost. The appeal was allowed with the aforementioned observations and directions, with no costs imposed on any party involved in the matter.