Hemant Surana vs Viswanatha Balasubramanian & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 614 of
Ratio decidendi
The rule this decision rests on
The Appellate Tribunal accepted a settlement between the corporate debtor and the financial creditor, reached after initiation of the corporate insolvency resolution process but before constitution of the Committee of Creditors, and treated it as a full and final settlement of the financial creditor's claim, so that nothing survived for adjudication in the appeal. Where the financial creditor's claim has been fully and finally settled and the settlement is admitted to be consensual and to satisfy the claim, the admission order under the insolvency process may be set aside, together with the consequential orders, appointments, moratorium and actions taken under it, and the corporate debtor released from the insolvency process to function through its Board of Directors, with the Interim Resolution Professional's fees and expenses left to the Adjudicating Authority to determine and borne by the corporate debtor.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Hemant Surana ...Appellant
Vs
Viswanatha Balasubramanian & Anr. ....Respondents
Present: For Appellant: Mr. Paritosh Budhiraja and Ms. Surabhi Maheshwari, Advocates. For Respondents: Ms. Sudha Sachdeva, Advocate for R-1.
ORDER
17.06.2019: Learned counsel for the Appellant has filed an Interlocutory
Application for preponement of Company Appeal (AT) (Insolvency) No. 614 of
2019 which was posted 'for orders' on 2nd July, 2019 at 2:00 PM. Preponement
is sought on the ground that the Appellant has arrived at a settlement with the
Respondent - Financial Creditor. In the given circumstances, the aforesaid
appeal is preponed and taken up today itself. I. A. No. 1907 of 2019 stands
disposed of.
2. Copy of the Settlement Agreement has been filed, perusal whereof brings
it to fore that the Corporate Debtor has arrived at an amicable settlement with
the Respondent - Financial Creditor in regard to amount claimed, subsequent
to initiation of Corporate Insolvency Resolution Process at the instance of
Respondent - Financial Creditor but before constitution of Committee of -2-
Creditors. It appears that in terms of interim order dated 31st May, 2019 passed
in the appeal, the Interim Resolution Professional had been directed not to
constitute Committee of Creditors. It appears in terms of the Settlement
Agreement dated 10th June, 2019, Respondent - Financial Creditor -'Viswanatha
Balasubramanian' has reached an agreement qua settlement of his claim with
the Corporate Debtor. Agreed 'Terms of Settlement' are recorded in the aforesaid
Settlement Agreement and parties have agreed to adhere to the same in letter
and spirit. It is admitted by learned counsel for the Respondent -
Financial Creditor that the Terms of Settlement are consionable and satisfy the
claim of the Financial Creditor. Thus, the Settlement Agreement is a full and
final settlement of claim of the Financial Creditor. The Settlement Agreement is
accordingly taken on record. Nothing survives for consideration in the instant
appeal. In view of the same, the impugned order of admission dated 24th May,
2019 passed by learned Adjudicating Authority (National Company Law
Tribunal), Principal Bench, New Delhi is set aside.
4. In the result, order(s) passed by the Adjudicating Authority appointing
'Resolution Professional', declaring moratorium, freezing of account, and all
other order(s) passed pursuant to impugned order and action taken by the
'Resolution Professional', including the advertisement published in the
newspaper calling for applications and actions are declared illegal and are
Company Appeal (AT) Insolvency No. 614 of 2019 -3-
set aside. The 'Corporate Debtor' is released from the rigour of law and is
allowed to function independently through its Board of Directors from
immediate effect. However, the Adjudicating Authority shall be at liberty to pass
appropriate orders in regard to the fee and expenditure admissible to the Interim
Resolution Professional for the period he has worked and expenditure he has
incurred in connection with the Resolution Process. Same shall be borne by the
Corporate Debtor.
5. The appeal stands disposed of with aforesaid observations. However, there
shall be no order as to costs.
(Justice Bansi Lal Bhat) Member (Judicial)
am/md
Company Appeal (AT) Insolvency No. 614 of 2019
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