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2019 (6) TMI 1276 - AT - IBCAdmissibility of the application - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case, as we find that the parties have reached provisional settlement prior to issuance of the impugned order and finally settled the matter on 5th December, 2018 i.e. prior to the constitution of the Committee of Creditors , in the light of the decision of the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT , we allow the Respondent to withdraw the application under Section 7. In effect, order (s), passed by the Adjudicating Authority declaring moratorium, freezing of account, and all other order (s) passed by the Adjudicating Authority pursuant to impugned order and action, if any, taken by the Interim Resolution Professional , including the advertisement published in the newspaper calling for applications all such orders and actions are set aside. Learned Adjudicating Authority will now close the proceeding - The Corporate Debtor (company) is released from all the rigour of law and is allowed to function independently through its Board of Directors from immediate effect. Appeal allowed.
Issues:
1. Appeal against the order admitting application under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Settlement between parties before the constitution of the Committee of Creditors. 3. Withdrawal of application under Section 7 based on settlement. 4. Directions regarding the release of the Corporate Debtor from moratorium and payment to the Interim Resolution Professional. Analysis: 1. The appeal was filed by the Directors/ Shareholders of 'M/s. Crown Realtech Private Limited' against the order admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The order included the admission of the application by the Financial Creditor, appointment of an Interim Resolution Professional, and declaration of a moratorium. 2. A settlement was reached between the parties, the Appellants and the Respondents (allottees of Real Estate), before the constitution of the Committee of Creditors. The settlement involved a payment made prior to the impugned order and a formal settlement reached after the order but before the Committee of Creditors was constituted. 3. The Respondent, the Financial Creditor, accepted the settlement and the receipt of the amount before the formation of the Committee of Creditors. In light of this settlement, the Tribunal allowed the Respondent to withdraw the application under Section 7, setting aside the impugned order and disposing of the application as withdrawn. 4. Consequently, all orders passed by the Adjudicating Authority, including the declaration of moratorium and actions taken by the Interim Resolution Professional, were set aside. The Corporate Debtor was released from the legal restrictions and allowed to function independently through its Board of Directors. The Interim Resolution Professional was directed to receive the remaining fees and costs within three weeks. In conclusion, the appeal was allowed, the application under Section 7 was withdrawn, and the Corporate Debtor was released from the insolvency proceedings. The settlement between the parties before the constitution of the Committee of Creditors played a crucial role in the Tribunal's decision to allow the withdrawal of the application.
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