The NCLAT set aside the Corporate Insolvency Resolution Process (CIRP) admission order following a settlement between the parties in the case of Tattva & Mittal Lifespaces Pvt. Ltd.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench led by Justice Rakesh Kumar Jain (Judicial Member) and Technical Members Mr. Naresh Salecha and Mr. Indevar Pandey reviewed an appeal and held that upon the parties reaching a settlement, the impugned order admitting the application under Section 7 of the Insolvency and Bankruptcy Code was set aside, and the initiated Corporate Insolvency Resolution Process was dropped, as the consent terms provided for the settlement of the Financial Creditor's claims. The court emphasized that the resolution of disputes through a settlement between the parties is permissible, overriding the initial admission order.
The appeal was directed against the order dated 22.02.2024, wherein the National Company Law Tribunal, Mumbai Bench, admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Ashok Tiwari, a Financial Creditor, against M/s Tattva & Mittal Lifespaces Pvt. Ltd. Following the admission, an Interim Resolution Professional was appointed, and the Financial Creditor was required to deposit ₹5 lakhs to cover initial Corporate Insolvency Resolution Process (CIRP) costs. The appellant, the Suspended Director of the Corporate Debtor, subsequently appealed against the admission order, indicating readiness to deposit ₹1,93,50,000 within three weeks.
Upon the deposit being made on 20.03.2024, further proceedings related to the impugned order were stayed. During the appeal's pendency, the parties engaged in settlement discussions, resulting in a specific order on 20.08.2024, where both parties indicated readiness to settle the dispute. They sought additional time to present the consent terms. On 10.09.2024, the parties informed the court of their ongoing settlement discussions and requested a brief extension to produce the consent term, which was eventually submitted and recorded.
The consent terms indicated that the parties agreed to request the release of the fixed deposit of ₹1,93,50,000, along with accrued interest, to the Financial Creditor. They also stated that the remaining amount would be handed over to the Financial Creditor's counsel. In light of this settlement, both parties jointly requested the NCLAT to set aside the impugned order and drop the initiated CIRP against the Corporate Debtor. The NCLAT, acknowledging the consent terms, disposed of the appeal, set aside the impugned order, and instructed the Registrar to release the fixed deposit along with interest within two weeks. The request from the Interim Resolution Professional for payment of his fees was kept open for further consideration before the Tribunal.
Mr. Abhijeet Sinha, Sr. Advocate, Mr. Anuj Tiwari, Mr. Aditya Shukla and Ms. Aroshi Pal, Advocates represented the Appellant.
Mr. Naman Tandon,and Mr. Monish Surendran, Advocates appeared for Respondent No. 1.
Mr. Shyam Sundar Kasera, IRP
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