Compliance with settlement terms allows for the revocation of liquidation orders under the Insolvency and Bankruptcy Code, clarifying the distinction between Liquidator's fees and liquidation expenses.

ORDER

1. Before entering into the merits of the present application, we find it appropriate to give a brief history of the proceedings that took place in the present case. The Corporate Debtor was put into Corporate Insolvency Resolution Process (CIRP) by an order of this Tribunal dated 08.07.2019 in C.P. (IB) No. 651/7/HDB/2018. During the CIRP, the Respondent herein submitted a Resolution Plan and the same was approved by the Committee of Creditors (CoC) of the Corporate Debtor on 07.01.2021 with 100% voting in favour of the plan. By an order dated 09.11.2021 in I.A. No. 43 of 2021 in C.P. (IB) No. 651/7/HDB/2018, this Tribunal approved the Resolution Plan for Corporate Debtor submitted by the Respondent herein.

2. This application was filed by Dr. K.V. Srinivas, the Chairperson of Monitoring Committee/Resolution Professional of M/s. Sainath Estates Private Limited (hereinafter referred as Corporate Debtor) seeking Liquidation of the Corporate Debtor on failure of the Respondent/Successful Resolution Applicant (SRA) to implement the Resolution Plan. The same was allowed by this Tribunal by an order dated 08.07.2022 and Liquidation Proceedings of Corporate Debtor were initiated by appointing Mr. Krishna Mohan Gollamudi as the Liquidator of the Corporate Debtor.

3. However, the SRA approached the Hon’ble NCLAT, Chennai Bench vide Company Appeal (AT)(CH)(Ins) No.326/2024 challenging the order dated 08.07.2022 of this Tribunal. The Hon’ble NCLAT by an order dated 06.09.2024 allowed the said appeal by modifying the Liquidation Order of this Tribunal passed on 08.07.2022 and issued certain directions. Accordingly, the present Application is suo-moto reopened on 04.11.2024 to enable the implementation of the directions of the Hon’ble NCLAT.

4. The order dated 06.09.2024 of the Hon’ble NCLAT is based on a memorandum of understanding recording the terms of settlement submitted by the SRA. The Hon’ble NCLAT modified the order of this Tribunal dated 08.07.2022 (Liquidation Order) and issued certain directions, the relevant portion of the same for adjudication of the present application is as follows:

“The Appellant has submitted a memo of settlement condoning thereof that parties have arrived to a conclusion in league with the terms given in the Memorandum of Understanding, which has been placed before this tribunal.

The Respondents who have concurred to the terms and condition of the memo, are represented by the learned counsel Mr. Abhijeet Sinha, Senior Advocate. He supports the terms of settlement and he submits that, if the Impugned Order 8/07/2022, is modified to the extent of the terms of the settlement he may not have any grievances as such.

The counsel for the appellant submits that, in terms of the settlement which has been arrived at, which the Counsel for the Appellant has produced before this Learned Tribunal, a Demand Draft bearing Number 378025 dated 19.08.2024, as executed in favor of Sainath Estates Private Limited by the Appellants herein, for a total amount of Rs. 10 crores. The xerox copy of the said demand draft which has been taken under the endorsement of the learned counsel and which has been placed on record and would form to be a part of the todays order. The Appellant assures to hand over the said Demand Draft thus issued in favor of the Respondent, to him (Respondent), within one week from today. If the same is not done within the aforesaid period, this order will have no effect and the appeal would automatically stand revived back. In view of what has been observed above