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TMI Blog2024 (5) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor and entered into the agreement and further on the asking of the CD filed a joint application in the first petition not only to bring on record the settlement but also to withdraw the first petition being sanguine of the fact that CD would keep its words and shall honour all the post-dated cheques in time but they were not aware of the intention of the CD as it had not made payment beyond Rs. 1,10,00,000 and were still in the arrears of more than Rs. 3 Cr. The Financial Creditor then filed the second petition of the reduced debt about which the default is not in question, therefore, the Adjudicating Authority has rightly admitted the application. It is observed that if this kind of tricks, played by the CD with the FC are allowed and the plea raised by the Appellant is accepted that the second petition on the ground of settlement agreement is not maintainable then it would give a premium to the unscrupulous CD to get the petition filed under Section 7 withdrawn on the basis of the settlement which was not to be ultimately followed. Definitely, this kind of attitude and act on the part of the CD is not appreciated. Amount paid out of the court during the pendency of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor an amount of Rs. 4,34,00,000/- towards the loan amount including interest and a further interest @ 12% p.a on the reducing balance amounting to Rs. 49,27,988/-. 5. As per the settlement agreement dated 26.07.2018, the Corporate Debtor agreed to pay to the Financial Creditors the amount of Rs. 4,34,00,000/- by way of 34 post-dated cheques in instalments from 01.10.2018 to 17.10.2020 and interest amount of Rs. 49,27,988/- by way of 27 post-dated cheques in instalments from 30.04.2019 to 30.08.2020. 6. In view of the aforesaid settlement arrived at between the parties on 26.07.2018, the first petition was withdrawn by the Financial Creditors on 27.07.2018. In this regard, a joint application was filed i.e. CA No. 644 of 2018 to bring on record the settlement agreement with a prayer that the matter has been settled and thus, the application filed by the Financial Creditors may be withdrawn. In view thereof, the application bearing CA No. 644 of 2018 was allowed and the application bearing CP No. (IB)258/PB/2018 was withdrawn. The order dated 27.07.2018 is reproduced as under:- A joint application being CA No. 644 of 2018 is filed by the respective parties placing on record the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has already paid a sum of Rs. 87 Lac to the Respondent No. 2 to 10 which is not denied by Counsel for Respondents. However, Counsel for Respondent No. 2 to 10 has submitted that after adjusting the said amount of Rs. 87 Lac in the component of interest, the Appellant is still liable to pay a sum of Rs. 4.10 Crores including principal amount of Rs. 3.34 Cr.. In reply, Counsel for the Appellant has argued that the Appellant is liable to pay only Rs. 3.24 Cr. (principal) and Rs. 10,07,686 (interest) claimed in the application filed under Section 7 for the purpose of withdrawal of CIRP and the Appellant is rather entitled to the refund of Rs. 87 Lac already paid to Respondent No. 2 10 and also to return of one of the property papers (CA No. 3, Ground Floor). Both Counsel for the parties have requested for an adjournment to argue the main appeal. On their request, adjourned to 06th March, 2024. Interim order to continue. It is made clear that no further adjournment shall be granted. 11. Counsel for the Appellant has submitted that unpaid instalment as per the settlement agreement cannot be treated as debt and breach of settlement agreement cannot be made a ground to file an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgument of the Appellant is accepted then it would give a premium to the defaulting party like the Corporate Debtor who would breach the settlement and challenge the second petition. If this kind of stand is accepted then it would discourage the settlement in cases under the Code. In this regard, he has referred to a decision of this Court in the case of Priyal Kantilal Patel Vs. IREP Credit Capital Pvt. Ltd. Anr., CA (AT) (Ins) No. 1423 of 2022 in which it has been held that a settlement agreement does not bar the FC from filing a Section 7 petition. It was further observed in that case that if the contention of the CD is believed to be true, then FC would be in a position of disadvantage by entering into a settlement with the CD and in a default of such settlement, the corporate debtor will easily be able to escape from its financial liabilities. It is further submitted that there is no question of seeking permission to the Court because it was not a case of revival of the same petition rather a second petition has been filed after adjusting the payment whatever has been made because the debt and default has never been disputed by the Corporate Debtor at any stage. It is also sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the instalments were not paid, the Financial Creditors filed the first petition which was admitted, moratorium was declared and IRP was appointed. In order to save itself to slip into CIRP, the CD approached the FC for a settlement which was ultimately arrived at in writing on 26.07.2018. 18. As per the terms and conditions of the settlement, the CD was to pay sum of Rs. 4,34,00,000 by way of 34 post-dated cheques in instalments from 01.10.2018 to 17.10.2020 and also component of interest of Rs. 49,27,988/- by way of 27 post-dated cheques in instalments from 30.04.2019 to 30.08.2020. The CD made the FC to believe that it would not deviate from the settlement and shall honour its commitments. As a result thereof, the FC agreed to file a joint application with CD before the Adjudicating Authority to bring on record the settlement and also to withdraw the first petition in view of the settlement. In this regard, an order was passed in the first petition on 27.07.2018. However, post dated cheques issued by the CD towards the principal amount and the interest either were dishonoured upon presentation or the CD requested the FCs for extension of time before the post-dated cheques were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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