2021 (7) TMI 947 - AT - Insolvency and Bankruptcy

Amount paid to the Interim Resolution Professional towards the CIRP Costs and the Fees - Appellant and the Corporate Debtor have already settled the dispute - Appellant and the Original Petitioner agreed that the Appellant will bear the CIRP Costs and the Fees of the IRP of the Corporate Debtor - HELD THAT - When the Original Petitioner has admittedly already entered into settlement, it is inappropriate for the learned counsel for the Original Petitioner Operational Creditor to now turn around and create doubts with regard to the amounts paid to the Resolution Professional. The Learned Counsel for the Original Petitioner is submitting that the Application was filed in capacity of Liquidator and as it is Liquidator it is answerable to stakeholders. When willful execution of the settlement agreement dated 19th July, 2021 is not questioned and the documents itself show that the Appellant would be making necessary payments of the CIRP Costs and the Fees of Resolution Professional, the Original Applicant who is not making the payment can not now be seen as turning around to question the quantum of the CIRP expenses and Fees. It is not convincing that the Learned Counsel for the Original Applicant is making out a case to look into the question of sufficiency or otherwise of the CIRP Costs and the Fees - appeal disposed off.

Summary

Issues Involved:
1. Admission of Application under Section 9 of the Insolvency and Bankruptcy Code (IBC).
2. Settlement Agreement between the parties.
3. Payment of Corporate Insolvency Resolution Process (CIRP) costs and fees.
4. Withdrawal of the original application and quashing of the impugned order.

Issue-wise Detailed Analysis:

1. Admission of Application under Section 9 of the Insolvency and Bankruptcy Code (IBC):
The appeal was filed by a shareholder of the Corporate Debtor against the order dated 29th August 2019, where the Adjudicating Authority (NCLT, Mumbai Bench) admitted the application under Section 9 of the IBC filed by the Operational Creditor. The Operational Creditor, undergoing its own Corporate Insolvency Resolution Process (CIRP) and now in liquidation, filed the application through its Liquidator.

2. Settlement Agreement between the parties:
The appellant and the Corporate Debtor settled the dispute, and a Settlement Agreement was entered into on 19th July 2021. The agreement outlined the terms of settlement, including the payment of ?6.50 Crores by the First Party (Edwell Infrastructure Hazira Limited) towards full and final settlement of the alleged outstanding dues. The settlement amounts were transferred to the designated account of the Liquidator, and the agreement was binding on both parties.

3. Payment of Corporate Insolvency Resolution Process (CIRP) costs and fees:
The appellant agreed to bear the CIRP costs and the fees of the Interim Resolution Professional (IRP). The IRP confirmed receipt of these payments and issued a No Dues Certificate. Despite some doubts expressed by the Original Petitioner regarding the amount paid towards CIRP costs and fees, the tribunal found no substance in these doubts, as the documents provided sufficient particulars of the expenses incurred by the IRP.

4. Withdrawal of the original application and quashing of the impugned order:
The tribunal, after considering the settlement and the submissions made, disposed of the appeal as settled. The impugned order was quashed and set aside, and the original application filed before the Adjudicating Authority was treated as withdrawn. Consequently, all orders passed by the Adjudicating Authority, including the appointment of the IRP, declaration of moratorium, and freezing of accounts, were set aside. The Corporate Debtor was released from all legal rigors and allowed to function independently through its Board of Directors. The IRP was directed to hand over charge to the Corporate Debtor's Board of Directors.