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TMI Blog2019 (3) TMI 1643X X X X Extracts X X X X X X X X Extracts X X X X ..... AND ANR. VERSUS UNION OF INDIA AND ORS. [ 2019 (1) TMI 1508 - SUPREME COURT] where it was held that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. In the present case, as we find that the parties have reached settlement prior to constitution of Committee of Creditors, in view of that the Appellant is entitled to derive advantage of the settlement - the application under Section 9 filed by the Operational Creditor dismissed. Appeal allowed. - Company Appeal (AT) (Insolvency) No. 794 of 2018 - - - Dated:- 12-3-2019 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial Creditors, submitted that the Committee of Creditors having already been constituted, settlement reached between the parties cannot be allowed. Further according to him, the settlement is an afterthought. 5. From the record the following fact emerge: (i) Section 9 application was filed by the Respondent Diamond Steel Enterprise (Operational Creditor) which was admitted by impugned order dated 5th December, 2018. Against the said order, the Appellant filed appeal and on 19th December, 2018 that is much prior to constitution of Committee of Creditors, when the matter was taken up, this court noticed the stand taken by the Appellant while issuing notice, which reads as follows: ORDER 19.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrent bills of the suppliers, salaries and wages of the employees /workmen, water and electricity bills etc. (ii) In the meantime, the Appellant prepared a draft dated 18th December, 2018 for ₹ 15,78,762/- (Rupees Fifteen Lakh Seventy Eight Thousand Seven Hundred and Sixty Two only) in the name of Diamond Steel Enterprises issued by Bank of India, Beliaghata Branch, Hatta Road, Kolkata. (iii) On 26th December, 2018, a Deed of Settlement was reached (enclosed at page 13 of I.A. No. 11 of 2019), which is in stamp paper which was purchased by the Operational Creditor prior to Deed of Settlement dated 26th December, 2018. Pursuant to the agreement, the Appellant prepared another additional draft for ₹ 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule11 of the NCLT Rules, 2016, allow or disallow an application for withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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