2023 (5) TMI 139 - AT - Insolvency and Bankruptcy

Seeking Revival of petition which was earlier withdrawn by the appellant on the plea that outside settlement had already been taken place - Operational Creditors - Dishonour of Cheque - HELD THAT - Fact remains that initially the appellant herein had filed application under Section 9 of Code before the NCLT. It is also a fact that the application filed under Section 9 was not even admitted and before its admission the applicant withdrew petition. Before the NCLT it was submitted that applicant and corporate debtor had arrived at a settlement and thereafter a prayer was made for withdrawal of the application. The prayer for withdrawal of application was allowed. However, while recording disposal the Ld. Tribunal also granted liberty to revive in case of violation of settlement condition. The said order was passed long back on 21.01.2019. It is also not in dispute that after about expiry of three and half years, the appellant herein approached the NCLT for revival of the application filed under Section 9 of the Code. Section 9 application was filed claiming Operational debt of Rs. 1,34,18,197/-. Without application being admitted on the plea that applicant and corporate debtor had settled the dispute the applicant withdrew the application. Since the Applicant before the NCLT voluntarily withdrew the application, there was no reason for revival of the case. However, the NCLT had granted liberty to revive the same. It is admitted position that last alleged dishonour of cheque had occurred on 24.12.2020. If the appellant was serious to pursue the matter then in that event immediately he would had approached the NCLT but he preferred to slumber over his right for several years and suddenly in the month of June, 2022 he approached the NCLT with a prayer to revive his application which was already withdrawn 21.01.2019. In such situation, it would be a futile exercise to entertain the present application. Appeal dismissed.

Summary

Issues involved:
The appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the dismissal of an Interlocutory application to revive a withdrawn petition due to alleged default in settlement terms.

Summary:

Issue 1: Dismissal of Interlocutory Application
The National Company Law Tribunal dismissed the Interlocutory Application (I.A. No. 3247/ND/2022) seeking to revive CP No. 1441/2018, which was withdrawn after a settlement agreement. The appellant claimed that the Corporate Debtor breached the settlement terms by dishonoring a cheque.

Issue 2: Liberty to Revive Petition
The NCLT had granted liberty to revive the petition in case of default in settlement terms. The appellant argued that the Adjudicating Authority erred in rejecting the application based on a previous judgment overruled by the Appellate Tribunal.

Issue 3: Delay in Seeking Revival
The appellant approached the NCLT for revival of the withdrawn application after a significant delay of over three and a half years following the alleged dishonoring of a cheque. The NCLT found the delay unreasonable and concluded that it was a futile exercise to entertain the application.

In conclusion, the appeal was dismissed by the Appellate Tribunal, upholding the NCLT's decision to reject the application for revival of CP No. 1441/2018 due to the delay in seeking relief and the significant portion of the operational debt already being cleared by the Corporate Debtor.