Jitender Jain vs Nuvoco Vistas Corporation Ltd. & Anr

Jitendra Jain ...Appellant

Vs.

Nuvoco Vistas Corporation Ltd. & Anr. ...Respondents

Present: For Appellant: - Mr. Rahul Chitnis, Ms, Mitali Gupta, Mr. Nitin Mishra, Advocates.

For Respondents: - Mr. Jayesh Desai and Mr. Aaditya A. Pande, Advocate for R.P.

Mr. Gaurav Bahl, Advocate for R-1.

Mr. Rajive R. Raj, Advocate.

O R D E R

19.11.2019─ The Respondent- 'Nuvoco Vistas Corporation Limited'-

('Operational Creditor') filed application under Section 9 of the Insolvency

and Bankruptcy Code, 2016 ("I&B Code" for short) for initiation of the

'Corporate Insolvency Resolution Process' against 'Neev Infrastructure

Private Limited'- ('Corporate Debtor'). The application was admitted by

the Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, Mumbai on 23rd September, 2019. After admission of the

application but before constitution of the 'Committee of Creditors', the

parties reached settlement on 1st October, 2019.

Contd/-...........

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2. It was brought to the notice of the Adjudicating Authority with

prayer to allow the Applicant- ('Operational Creditor') to withdraw the

application under Section 9. However, the Adjudicating Authority

dismissed the Miscellaneous Application which was preferred by the

parties as withdrawn.

3. Learned counsel for the Appellant submits that the Miscellaneous

Application was filed through the 'Interim Resolution Professional' in view

of the settlement reached by the parties. However, the 'Interim Resolution

Professional' for reasons best known to him has withdrawn the same and

the Adjudicating Authority by impugned order dated 23rd September,

2019 has not recorded the reasons for withdrawal.

4. Learned counsel for the Appellant relied on the decision of the

Hon'ble Supreme Court in "Swiss Ribbons Pvt. Ltd. & Anr. vs. Union

of India & Ors.─ Writ Petition (Civil) No. 99 of 2018" to suggest that

the Adjudicating Authority had inherent power under Rule 11 of the

NCLT Rules, 2016 to allow the 'Operational Creditor' to withdraw the

application under Section 9.

5. Mr. Gaurav Bahl, learned counsel appears on behalf of the

Respondent- 'Nuvoco Vistas Corporation Limited'- ('Operational Creditor')

I.A. No. 3435 of 2019 IN Company Appeal (AT) (Insolvency) No. 1145 of 2019 -3-

also agreed that the 'Terms of Settlement' was reached on 1st October,

2019 and for the said reason application was moved for withdrawal of the

application under Section 9.

6. Mr. Jayesh Desai, learned counsel appearing on behalf of the

'Interim Resolution Professional' accepts that the 'Committee of Creditors'

was constituted much after the settlement and application filed for

withdrawal of the application. However, no reply has been given as to why

Miscellaneous Application for withdrawal of the application was filed by

the 'Interim Resolution Professional'.

7. From the record we find that non-judicial stamp paper was

purchased by the parties on 23rd August, 2019 i.e. prior to the admission

of the application under Section 9 and the parties reached settlement

agreement on 1st October, 2019. Therefore, we find that there was a

genuine step taken by the parties to settle the claim.

8. It is informed that the Appellant has already paid the amount in

favour of the 'Operational Creditor' in terms of the Settlement.

9. Taking into consideration the fact that the 'Interim Resolution

Professional' has performed the duty for more than 2 months and has

incurred certain cost, we asses fee at Rupees Three Lakhs which

I.A. No. 3435 of 2019 IN Company Appeal (AT) (Insolvency) No. 1145 of 2019 -4-

Appellant has agreed to pay in favour of Mr. Arun Kumar Gupta, the

'Interim Resolution Professional'.

10. In view of the aforesaid development and in exercise of powers

conferred under Rule 11 of the National Company Law Appellate Tribunal

Rules, 2016, we accept the 'Terms of Settlement' and set aside the

'Corporate Insolvency Resolution Process' and allow the application filed

by the 'Operational Creditor' for withdrawal of application under Section

9. The Adjudicating Authority will now close the proceeding. The 'Interim

Resolution Professional' on receipt of fee will immediately hand over the

records and assets of the 'Corporate Debtor' to the management of the

'Corporate Debtor'. The 'Corporate Debtor' (company) is released from all

the rigours of Law and is allowed to function independently through its

Board of Directors from immediate effect.

The Appeal is allowed with aforesaid observations and directions.

However, in the facts and circumstances of the case, there shall be no

order as to cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial)

(Justice Venugopal M) Member(Judicial) Ar/g I.A. No. 3435 of 2019 IN Company Appeal (AT) (Insolvency) No. 1145 of 2019