Dnyaneshwar Shankar Unde vs Shukla Dairy Private Limited

Dnyaneshwar Shankar Unde, ...Appellant(s) Propreitor of Swadarshan Dairy

Versus

Shukla Dairy Pvt. Ltd. ... Respondent(s) Present: For Appellant : Mr. Malak Bhatt, Ms. Neeha Nagpal, Mr. Shreyansh Chopra, Advocates. For Respondents : Mr. Jha Amlendu Kumar, Ms. Disha Choudhary, Advocates.

ORDER

(Hybrid Mode) Per: -Justice Rakesh Kumar Jain (Oral) 22.09.2025: This appeal is directed against the order dated

10.05.2024 by which application filed by the appellant bearing restoration

application /12(AHM)2024 in CP (IB) 239 of 2020 has been dismissed on the

ground that there was no clause for revival of the application/CP (IB) No.

239 of 2020 in case of a breach in the terms and conditions of the

settlement by the Respondent.

2. In brief, the appellant filed an application under Section 9 of the

IBC, 2016 for the resolution of its debt of Rs. 1 Crore 49 lakhs. During the

pendency of the application and after the appearance of the Respondent, the

Tribunal passed the order that the parties have decided to settle the dispute

by way of a settlement agreement.

3. In this regard, the order was passed by the Tribunal on 16.02.2021,

read as under:

"No one appeared for the Operational Creditor. Ld. Counsel Ms. Vaibhavi Parikh appeared for the Corporate Debtor.

An E-mail is produced before us that matter is settle and affidavit is also filed. It appears that matter is settled, hence, matter stands disposed of with liberty to get this application revived, in case, settlement fails. Accordingly, CP (IB) 239 of 2020 stands disposed of".

4. The parties entered into a Memorandum of Understanding (the

'MoU') on 06.11.2020. According to the appellant, the Respondent

committed breach in the terms and conditions of the MoU, therefore, it filed

the application bearing Restoration Application/12(AHM)2024 which has

been dismissed by the Tribunal only on the ground that there was no clause

in MoU that in case of breach of terms and conditions by the Respondent,

the main petition bearing CP (IB) No. 239 of 2020 can be restored on an

application filed by the appellant.

5. Counsel for the appellant has argued that the Tribunal had already

recorded an order on 16.02.2021, referred to above, in which it had

specifically observed that if the settlement fails then application for revival of

the main petition can be filed.

6. Besides this, it is submitted by the appellant that it would be

cheating on the part of the Respondent to enter into a MoU to wriggle out of

the rigours of the application filed under Section 9 on the basis of which the

Respondent could have been pushed into CIRP and then not honouring the

terms and conditions and contesting the application filed for restoration on the ground that there is no such clause in the MoU for revival of the

application in case of breach on its part.

7. On the other hand, Counsel for the Respondent has argued that as

a matter of fact the entire payment has been made, therefore, there is no

need for revival of the application.

8. In rejoinder, Counsel for the appellant has submitted that the

Respondent has paid only Rs. 39,40,000/- and Rs. 1,10,22,721/- is still to

be paid under the MoU.

9. After hearing Ld. Counsel for the parties and examining the

available record, we are of the considered opinion that the Tribunal has

committed a patent error in dismissing the application of the appellant for

restoration of the main petition on the ground that there was no clause in

the MoU for revival of the application in case there is a breach of terms and

conditions of the MoU by the Respondent, firstly, because the Tribunal itself

had earlier passed an order on 16.02.2021, which we have already referred

to in the earlier part of this order, as per which the Tribunal had given

liberty to the appellant to file an application for revival of the main case, in

case the settlement fails and secondly, the Respondent cannot be allowed to

blow hot and cold in the same breath, as has happened in the present case,

because the Respondent for avoiding the admission of the application filed

under Section 9 by which it could have slipped into CIRP entered into MoU

and agreed to pay the entire debt of the appellant but later on stopped

making the payment which gave a cause of action to the appellant for revival

of the application.

10. We do not appreciate this kind of action on the part of the

Respondent as we have also dealt it in many cases earlier. One of such case

is 'Archangles Distributors Pvt. Ltd. vs. Ideal Financing Corporation

Ltd.', CA (AT) (Ins) No. 1143 of 2024 decided on 19.12.2024.

11. Thus in view of aforesaid facts and circumstances, the present

appeal succeeds. The Impugned order dated 10.05.2024 is hereby set aside.

12. The Restoration Application No. 12(AHM)2024 is allowed and the

main CP (IB) 239 of 2020 is hereby restored to its original number.

13. The parties may bear their own costs. Pending IA's if any are hereby

closed.

14. Since the Respondent has submitted that the entire payment has

been made, therefore, it shall be at liberty to raise this issue before the

Tribunal in the main CP.

15. Parties to appear before the Tribunal on 27.10.2024.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Indevar Pandey] Member (Technical) sr/rr