2024 (9) TMI 623 - SCH - IBC

Order of NCLT admitting Section 7 application filed by the first respondent, affirmed - Full and final settlement of the claim of the first respondent reached at - HELD THAT - It appears that the Corporate Debtor has been able to provide for the claims raised against it. However, the learned counsel appearing for the second respondent submitted that the quantum of CIRP expenses till the date of termination of CIRP is yet to be determined and the same will have to be borne by the Corporate Debtor. This question is kept open for the NCLT to determine - the appellant shall furnish a bank guarantee within a period of two weeks from today for an amount of Rs 1,12,37,781 being the amount claimed towards CIRP expenses in accordance with the affidavit of the Resolution Professional. The bank guarantee shall be in the name of the Resolution Professional. The operational creditors and other creditors, if any, will have their own right to avail such legal remedies as may be available to them in law with respect to their claims if any. The impugned order passed by the NCLAT is set aside and the CIRP initiated in respect of the second respondent, namely, Bazargaon Paper and Pulp Mills Private Ltd stands hereby terminated - appeal allowed.

Summary

Issues:
Appeal against NCLAT order affirming NCLT's admission of Section 7 application under Insolvency and Bankruptcy Code 2016; Settlement reached between parties; Determination of CIRP expenses; Submission of bank guarantee by the appellant; Termination of CIRP and pending applications.

Analysis:
The Supreme Court heard an appeal under Section 62 of the Insolvency and Bankruptcy Code 2016 filed by the suspended Director of the Corporate Debtor against the order of the NCLAT affirming the NCLT's admission of the Section 7 application. The appellant was dissatisfied with the NCLT's decision and raised multiple contentions before the NCLAT, which were not accepted. Consequently, the appellant approached the Supreme Court seeking relief from the impugned order (para 1-3).

During the hearing, the parties informed the Court about an amicable settlement reached for the purpose of disposing of the appeal. As part of the settlement, the appellant handed over Demand Drafts to the Resolution Professional to settle the claims of the first respondent and other companies. Additionally, the Court noted that the Corporate Debtor had provided for the claims against it, but the determination of CIRP expenses was pending, which would need to be borne by the Corporate Debtor (para 6-7).

In light of the settlement and the submissions made, the Court directed the appellant to furnish a bank guarantee within two weeks for the amount claimed towards CIRP expenses. The Court allowed the appeal, set aside the NCLAT's order, and terminated the CIRP initiated against the Corporate Debtor. However, the determination of CIRP expenses till the current date was left pending before the NCLT for resolution within six weeks (para 8-10).

The Court emphasized that operational creditors and other creditors retained the right to pursue legal remedies available to them concerning their claims. The Court also disposed of any pending applications related to the matter (para 9-11).