2021 (3) TMI 108 - Tri - Insolvency and Bankruptcy

Seeking revival of application filed by the applicant under Section 9 of the Insolvency and Bankruptcy Code, 2016 - parties have amicably settled their disputes as the Corporate Debtor has agreed to pay the amount due and payable to Operational Creditor and has given a time schedule for making such payment - HELD THAT - In view of the settlement arrived between the parties, this Tribunal need not revive the petition and pass any orders. However, both parties are directed to strictly follow the agreement between them made in the Settlement Agreement. Liberty is granted to the applicant to approach the appropriate forum, in case of failure in implementing the Settlement Agreement by the Corporate Debtor. Application disposed off.

Summary

Issues:
Revival of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 due to default by Corporate Debtor in making payment as per settlement agreement.

Detailed Analysis:
1. The Operational Creditor filed an application under Section 9 of the Insolvency and Bankruptcy Code against the Corporate Debtor for not paying the debt. A mutual settlement agreement was signed, and the application was withdrawn with the liberty to revive it in case of default by the Corporate Debtor.
2. The Corporate Debtor failed to abide by the settlement terms, leading to a default amounting to ?65,79,692.13. The Operational Creditor filed a fresh application seeking revival of legal proceedings as per the settlement agreement.
3. Despite several adjournments, the Operational Creditor failed to produce the settlement agreement. Eventually, a Settlement Agreement was executed between the parties, outlining a payment schedule for the outstanding amount.
4. The Settlement Agreement detailed the payment schedule, acknowledgment of outstanding amount, and mutual withdrawal of legal proceedings by both parties upon successful payment by the Corporate Debtor.
5. The Tribunal reviewed the Settlement Agreement and observed that with the settlement between the parties, there was no need to revive the initial application. Both parties were directed to adhere to the terms of the Settlement Agreement, with liberty granted to the Operational Creditor to seek legal recourse in case of non-compliance by the Corporate Debtor.
6. Consequently, the Tribunal disposed of the matter, and the related interim application was dismissed as it became infructuous post the resolution of the main issue.

This judgment highlights the importance of honoring settlement agreements and the legal implications of defaulting on such agreements under the Insolvency and Bankruptcy framework.