Kaushal Kantilal Salvi vs Sqm Europe N.V. & Anr
- CitationCompany Appeal (AT) (Insolvency)No. 1158 of 2019
Ratio decidendi
The rule this decision rests on
Where the parties have settled the operational creditor's Section 9 application before a Committee of Creditors has been constituted, the Appellate Tribunal, exercising its power under Rule 11 of the NCLT Rules, 2016, may set aside the admission order and permit the application to be withdrawn, releasing the corporate debtor from the corporate insolvency resolution process on compliance with the terms of the settlement. The fee and costs payable to the Interim Resolution Professional may be fixed by the Tribunal in the circumstances of the case, including where he has incurred costs and is entitled to fees for the period of his tenure, and such amount may be directed to be paid by the appellant.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Kaushal Kantilal Salvi .....Appellant Vs. SQM Europe N.V. & Anr. ......Respondents
Present : For Appellant: Mr. Anil Kaushik, Mr. Rajinder Singh, Mr. Shankar, Mr. Naman Garg, Advocates For Respondents: Mr. Preet Pal Singh, Mr. Rahul Ahuja, Advocates
Mrinali Prasad, Advocate
O R D E R
11.12.2019 - 'SQM Europe N.V. & Anr.' ('Operational Creditor') has moved
an application u/s 9 of the Insolvency & Bankruptcy Code, 2016 ('I&B' Code, for
short) for initiation of 'Corporate Insolvency Resolution Process' against 'Salvi
Chemical Industries Ltd.' ('Corporate Debtor'). The Adjudicating Authority
('National Company Law Tribunal') Mumbai Bench, by impugned order dated
15th October, 2019 admitted the application.
On 7th November, 2019, when the matter was taken up, the Learned
Counsel for the Appellant submitted that the Appellant has already taken steps
....contd.
2
for settlement with the 'Operational Creditor'. It was also informed that
'Committee of Creditors' has not been constituted. In the circumstances, while
notice was issued to the 'Interim Resolution Professional', he was asked not to
constitute 'Committee of Creditors', if not yet constituted.
The Respondent 'SQM Europe N.V. & Anr.' ('Operational Creditor') and
'Interim Resolution Professional' have appeared. A Settlement Agreement dated
9th December, 2019 has been filed, in terms of which, the payment is to be made
as per schedule.
Learned Counsel appearing on behalf of 'Interim Resolution Professional'
submits that while accepting that the 'Committee of Creditors' was not
constituted also stated that the said 'Resolution Professional' has increased the
cost and entitled for fee for about two months.
In view of the fact that parties have reached the settlement prior to the
constitution of 'Committee of Creditors' and in exercise of powers conferred by
Rule 11 of 'NCLT' Rules, 2016, we set aside the impugned order dated 15th
October, 2019 and allow the application u/s 9 to be withdrawn. The 'Corporate
Debtor' is released from the rigour of 'Corporate Insolvency Resolution Process'
and subject to compliance of the terms and conditions as made in the said
agreement which should be treated to be direction of this Appellate Tribunal. On
failure, it will be open to the Respondent
....contd.
3
to ask for initiation of contempt proceedings and also for recall of this order so
as to revive the 'Corporate Insolvency Resolution Process'.
So far as fee and cost of 'Interim Resolution Professional' is concerned we
assess it at Rs. 4 lakhs to which Learned counsel for 'Interim Resolution
Professional' agrees. The Appellant will pay the amount of Rs. 4 lakhs within
two weeks by RTGS or Demand Draft.
The Appeal is allowed with aforesaid observations and directions.
[Justice S. J. Mukhopadhaya] Chairperson
[ Justice Bansi Lal Bhat ] Member (Judicial)
[Justice Venugopal M.] Member (Judicial)
ss/sk
Company Appeal (AT) (Insolvency)No. 1158 of 2019
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