Dr. Syed Sabahat Azirn vs Rent A Computer
- CitationCompany Appeal(AT)(Insolvency) No. 617 of 2018
Ratio decidendi
The rule this decision rests on
The existence of a pre-existing dispute between the corporate debtor and the operational creditor, disclosed on the record, is a sufficient ground to set aside an order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, where the parties have since settled that dispute. Where parties to a Section 9 proceeding have filed a settlement agreement before the Appellate Tribunal, the settlement is to be treated as final and binding on both parties, and the Tribunal may, on that basis, set aside the admission order, declare consequential orders such as the appointment of an Interim Resolution Professional, moratorium and freezing of accounts illegal, dismiss the Section 9 application, and release the corporate debtor from the proceedings.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Dr. Syed Sabahat Azim ...Appellant
Vs
M/s Rent A Compter ....Respondent
Present:
For Appellant: Mr. Arun Kathpalia, Senior Advocate with Ms. Misha, Mr. Shantanu Chaturvedi, Ms. Bani Brar and Ms. Jasveen Kaur, Advocates
For Respondent: Appeared but did not sign the Appearance Slip.
ORDER
25.10.2018 The Appellant, Founder Promoter of Global Healthcare
Systems Private Limited has preferred this appeal against the order dated 27th
September, 2018 passed by the Adjudicating Authority (National Company Law
Tribunal), Kolkata Bench, Kolkata in C.P.(IB) No. 804/KB/2018 whereby the
application under Section 9 of Insolvency & Bankruptcy Code, 2016 ('I&B Code'
in short) preferred by M/s Rent A Computer ('Operational Creditor') has been
admitted.
2. Mr. Arun Kathpalia, learned Senior Counsel appearing on behalf of the
Appellant submits that the petition preferred by Respondent No. 9 of I & B Code
was not maintenable as there was pre-existing dispute much prior to issuance
of notice under Section 8(1) of I & B Code and the Adjudicating Authority failed
to consider the same.
Company Appeal (AT)(Insolvency) No. 617 of 2018 Page 1 of 3
3. Today when the matter was taken up, learned Senior Counsel for the
Appellant submits that the parties have already settled the dispute and copy of
the Settlement of Agreement dated 24th October, 2018 has been enclosed in
terms of which a sum of Rs. 31 lakhs is to be paid to M/s Rent A Computer in
three instalments within 90 days in terms of the agreement.
4. Learned Advocate appearing on behalf of M/s Rent A Computer accepted
that the matter has been settled between the parties and submits that they are
expecting that the Appellant will comply with the settlement within the time
provided in the agreement.
5. From the records we find that there are certain disputes ongoing between
the parties. For example, by e-mail dated 9th August, 2016, one Mr. Piyush
Srivastava on behalf of the 'Corporate Debtor' intimated Mr. Sanjay Dixit of the
'Operational Creditor' that they could not receive any service from their side since
a long period. There appears to be certain disputes due to termination of contract
also issued by 'Corporate Debtor'.
6. Taking into consideration the fact that there was existence of dispute and
parties have now settled the matter, we set aside the impugned order dated 27th
September, 2018.
7. In effect, order(s) passed by the Adjudicating Authority appointing any
'Interim Resolution Professional', declaring moratorium, freezing of account, and
all other order(s) passed by the Adjudicating Authority pursuant to impugned
order and action, taken by the 'Interim Resolution Professional', including the
advertisement published in the newspaper calling for applications all such
Company Appeal (AT)(Insolvency) No. 617 of 2018 Page 2 of 3 orders and actions are declared illegal and are set aside. The application
preferred by Respondent under Section 9 of the I & B Code, 2016 is dismissed.
Learned Adjudicating Authority will now close the proceeding. The 'Corporate
Debtor(Company) is released from all the rigour of law and is allowed to function
independently through its Board of Directors from immediate effect.
8. The Adjudicating Authority will fix the fee of 'Interim Resolution
Professional' and the 'Corporate Debtor' will pay the fees of the 'Interim
Resolution Professional', for the period he has functioned.
9. As the parties have filed settlement agreement before this Appellate
Tribunal, the said Settlement should be treated to be final and both the parties
are bound by the same. On failure, the concerned party may bring the failure to
the notice of this Appellate Tribunal for taking necessary action. The appeal is
allowed with the aforesaid observations. No Cost.
[Justice S.J. Mukhopadhaya] Chairperson
[Justice Bansi Lal Bhat] Member (Judicial) Akc/Sk
Company Appeal (AT)(Insolvency) No. 617 of 2018 Page 3 of 3
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