Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 2578

NATIONAL COMPANY LAW TRIBUNAL
Rammurti Kushawaha, Member (Judicial), Yogendra Kumar Singh, Member (Technical)
JSB Cements Limited – Appellant
Versus
Satnam Global Infraprojects Limited – Respondent
IA(IBC)/58/GB/2025|CP(IB)/20/GB/2024

Advocates:
For the Appellants/Petitioners: Mr. Suman Kumar, Adv., Mr. Shailesh Kumar Singh, Adv., Mr. Joy Saha (Sr. Adv.), Mr. R. Phukan (Adv.)
For the Respondents: Mr. Joy Saha, Sr. Adv., Ms. Ankita Agrahari, Adv., Mr. Shailesh Kr. Sinha, Mr. S. Kumar (Advs.)

The Adjudicating Authority under the IBC cannot dismiss a Section 7 petition under Section 60(5) based on a preliminary MoU for settlement when the final detailed settlement agreement has not been executed. Its power is limited to verifying default.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 (IBC) - Section 7 - Section 60(5) - National Company Law Tribunal Rules, 2016 - Rule 11 - Power of Adjudicating Authority - Scope of jurisdiction under Section 60(5) - An application under Section 60(5) seeking dismissal of a Section 7 petition based on a Memorandum of Understanding (MoU) for settlement cannot be granted where the MoU is preliminary and a detailed final settlement agreement as per its own terms has not been executed - The Adjudicating Authority cannot compel a party to settle a dispute or withdraw proceedings solely based on an incomplete or contingent settlement agreement - Reliance placed on E.S. Krishnamurthy vs. M/s Bharath Hi Tech Builders Pvt. Ltd., Civil Appeal No. 3325 of 2020, for the principle that the Adjudicating Authority's power under Section 7(5) is limited to verifying the existence of a default and admitting or rejecting the application. (Paras 14-18)

(B) Settlement Agreements - Enforceability - A preliminary or pre-settlement arrangement, such as an MoU, which contemplates the future execution of a detailed agreement for complete and final closure of disputes, is not sufficient by itself to warrant dismissal of insolvency proceedings - The obligation to withdraw proceedings under the Code is a matter to be resolved between the parties in accordance with the final settlement terms and is not a matter for the Adjudicating Authority to enforce under Section 60(5). (Paras 15-16)

Facts of the case:
The Applicant, JSB Cements Limited (the Corporate Debtor), filed an Interlocutory Application under Section 60(5) of the IBC seeking the dismissal of a Company Petition filed by the Financial Creditor, Satnam Global Infraprojects Limited, under Section 7 of the Code. The Applicant claimed that after the Section 7 petition was filed, the parties entered into a Memorandum of Understanding (MoU) on 07.05.2025 to settle the dispute. The MoU required the Applicant to pay a total amount in installments, with the first installment of Rs. 50,00,000/- to be followed by the Financial Creditor withdrawing all cases, including the Section 7 petition. The Applicant paid several installments, but the Financial Creditor did not withdraw the petition, leading to the present IA. The Financial Creditor contended that the Applicant had defaulted on payments under the MoU and that a final settlement agreement, as required by the MoU, was never executed.

Findings of Court:
The Tribunal observed that the MoU was a preliminary arrangement and that a detailed agreement for final closure of all disputes, as per Clause 8 of the MoU, had not been executed. The Tribunal noted that the withdrawal of the Company Petition is at the sole discretion of the Financial Creditor. Relying on the Supreme Court judgment in E.S. Krishnamurthy vs. M/s Bharath Hi Tech Builders Pvt. Ltd., the Tribunal held that the Adjudicating Authority's jurisdiction under Section 7(5) is limited to verifying default and admitting or rejecting the application; it cannot compel a party to settle a dispute. Consequently, it declined to exercise its jurisdiction under Section 60(5) to dismiss the main Section 7 petition based on an incomplete settlement arrangement.

Issues: The main issue was whether an application under Section 60(5) of the IBC for dismissal of a Section 7 petition can be allowed based on an MoU that the Applicant claims has been substantially performed, where the MoU itself contemplates a final detailed agreement for full settlement, and where the Financial Creditor disputes compliance and refuses to withdraw the petition.

Ratio Decidendi: The Adjudicating Authority under the IBC cannot compel a party to withdraw a Section 7 petition or settle a dispute based on an incomplete or contingent settlement agreement (such as a preliminary MoU). Its power under Section 7(5) is limited to verifying the existence of a default and then either admitting or rejecting the application. Therefore, the relief of dismissal of a Section 7 petition on such grounds under Section 60(5) cannot be granted. Result : Present I.A. (IBC)/58/GB/2025 stands dismissed and disposed of. The main Company Petition, CP (IB)/20/GB/2024, was listed for further consideration. (Paras 20-23)

Table of Content
1. application for dismissal of section 7 petition (Para 1)
2. applicant's arguments: settlement and mou compliance (Para 2 , 3 , 4)

Appearances (through video conferencing/Physical):

For Applicant : Mr. Joy Saha (Sr. Adv.), Mr. R. Phukan (Adv.) For Respondent : Mr. Shailesh Kr. Sinha, Mr. S. Kumar (Advs.)

Order pronounced on: 05.05.2026 As Per Bench

1. This present Interlocutory Application is filed by JSB Cements Limited (‘Applicant’), under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) read with Rule 11 of the National Company Law Tribunal, Rules 2016 (‘NCLT Rules’), seeking dismissal of Company Petition CP (IB)/20/GB/2024 (Satnam Global Infraprojects Limited vs JSB Cements Limited) filed by Satnam Global Infraprojects Limited (‘Financial Creditor/ Respondent’) under Section 7 of the Code read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)

Rules, 2016. The Applicant seeking the following substantive:

a) An order for dismissal of CP(IB)/20/GB/2024 (Satnam Global Infraprojects Limited vs JSB Cements Limited);

b) An order of stay of all proceedings and/ or all further proceedings connecting with or arising out of CP(IB)/20/GB/2024 (Satnam Global Infraprojects Limited vs JSB Cements Limited) be stayed till disposal of this application;

c) Pass ad-interim order in terms of above interim order.

2. Submissions on behalf of the Applicant:

2.1 The Applicant is a company duly incorporated under the provisions of the Companies Act, 1956 and is an existing company within the meaning of the Companies Act, 2013. The Applicant is engaged in the business of manufacturing cement and was one of the largest cement manufacturing companies in the eastern part of India, being at the forefront of the Indian Cement industry.

2.2 The Applicant further submitted that the Respondent/Financial Creditor has filed an application under Section 7 of the Code, alleging default on the part of the applicant and seeking initiation of the Corporate Insolvency Resolution Process (‘CIRP’) against applicant.

2.3 Furthermore, the Applicant submitted that the application filed under Section

7 of the Code by the Financial Creditor is illegal, perverse and wholly misconceived. The said application has been filed with mala fide intent to coerce and extort money from the applicant in order to make illegal gains from the Applicant.

2.4 It was further submitted by the Applicant that, no single payment made between the date of execution of the Agreement dated 18.08.2020 and the stipulated timeline which is proved by their own admission vide submitted documents as annexed to the Section 7 petition of the Code. Consequently, the purpose of the said agreement was frustrated and not complied with. Hence, it is a matter of contractual obligation dispute which does not fall under the ambit and scope of Section 7 of the Code, and therefore, the present proceedings are not maintainable.

2.5 The Applicant further submitted that the Financial Creditor had also lodged a false criminal complaint with the Economic Offences Wing against the directors of the alleged Applicant which has already been closed by the Economic Offences Wing in the preliminary enquiry stage itself after considering all the facts and circumstances. The notices from the Economic Offences Wing are annexed as ‘Annexure- A’ of the Application.

2.6 The Applicant without admitting the facts of the Section 7 application, further submitted that the present interlocutory application is only filed to bring on record the fact that the Respondent/Financial Creditor had approached the applicant for settlement of the claims of the respondent. Pursuant to which both parties entered into a Memorandum of Understanding (‘MoU’) dated 07.05.2025 on terms and conditions as mentioned in MoU. A copy of the MoU is annexed as ‘Annexure- B’ of the Application.

2.7 Furthermore, the Applicant as per MoU admitted and agreed to pay an amount of Rs. 22,40,00,000/- to the Respondent

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2026 Supreme(Online)(NCLT) 2578

NATIONAL COMPANY LAW TRIBUNALRammurti Kushawaha, Member (Judicial), Yogendra Kumar Singh, Member (Technical)JSB Cements Limited – AppellantVersusSatnam Global Infraprojects Limited – RespondentIA(IBC)/58/GB/2025|CP(IB)/20/GB/2024

The Adjudicating Authority under the IBC cannot dismiss a Section 7 petition under Section 60(5) based on a preliminary MoU for settlement when the final detailed settlement agreement has not been executed. Its power is limited to verifying default.

NATIONAL COMPANY LAW TRIBUNAL
Rammurti Kushawaha, Member (Judicial), Yogendra Kumar Singh, Member (Technical)
JSB Cements Limited – Appellant
Versus
Satnam Global Infraprojects Limited – Respondent
IA(IBC)/58/GB/2025|CP(IB)/20/GB/2024