Back
R. RAGHUNANDAN RAO
Tulasi Seeds Private Limited – Appellant
Versus
Union of India – Respondent
JUDGMENT
R.RAGHUNANDAN RAO, J. - The 3rd respondent had initiated a Corporate Insolvency Resolution Process against the petitioner herein, before the National Company Law Tribunal Amaravati Bench (for short 'NCLT'), by way of CP(IB)No.28/9/AMR/2020, under Sec. 9 of the Insolvency and Bankruptcy Code, 2016. This application was filed on the ground that the petitioner had defaulted an operational debt of Rs.8,98,12,678.00.
2. While the matter was pending before the NCLT, the petitioner and the 3rd respondent executed a Memorandum of Understanding, dtd. 20/7/2020, under which it was recorded that :-
a) The 3rd respondent agreed to withdraw the application filed before the NCLT immediately.
b) On withdrawal of the application, the petitioner was to pay an amount of Rs.5,00,00,000.00 to the 3rd respondent as full and final settlement.
c) This amount of Rs.5,00,00,000.00 was to be paid in installments of Rs.20,00,000.00 each in 25 installments, within 45 days from the date of withdrawal of the application.
d) The mode of payment was to be online banking through RTGS to the account of the 3rd respondent.
3. The Memorandum of Understanding also contained a term that the above compromise was
The NCLT has the inherent power to restore a petition that has been withdrawn with its permission, and this power is derived from Rule 11 of the NCLT Rules and the residuary jurisdiction conferred on....
The court ruled that the NCLAT erred in approving a settlement without adhering to the procedural requirements of the Insolvency and Bankruptcy Code, emphasizing the collective nature of insolvency p....
(1) Plea of alternative remedy is a self-imposed restriction by superior Courts and is never an absolute bar unless barred by statute.(2) Application under Section 12A of Insolvency and Bankruptcy Co....
Withdrawal of insolvency petition on settlement bars restoration on default; liberty clause permits fresh proceedings or execution for balance, not revival of closed matter.
Settlement agreements must allow revival actions amidst defaults, ensuring creditors are protected from deceitful behavior.
The court clarified that under Section 10-A, defaults continuing after a moratorium remain subject to insolvency proceedings, affirming NCLT's authority in such matters.
Corporate Insolvency Resolution Process (CIRP) – Settlement cannot be stifled before constitution of Committee of Creditors in anticipation of claims against Corporate Debtor from third persons – Wit....
CIRP proceedings under Section 7 of the Insolvency and Bankruptcy Code are independent and can proceed concurrently with winding-up proceedings, with overriding effect and rights of secured creditors....
The court established that the nature of challenge under Article 226 and the absence of jurisdiction could trigger the invocation of the High Court's jurisdiction. The court also clarified that the f....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
