Mehul Harish Gosar vs Athena Constructions Limited & Ors

IN THE MATTER OF: Mehul Harish Gosar ...Appellant Versus Athena Constructions Ltd. & Ors. ...Respondents Present: For Appellant : Mr.Apoorv Shukla, Mr. Prerak Sharma, Mr. Prabhleen A. Shukla and Mr. Pradymna Tyagi Advocates.

For Respondents : Ms. Honey Satpal, Mr. Praadyuman Tyagi, Mr. Akash Agarwalla and Mr. Aman, Advocates for Applicant in I.A No. 869 of 2026.

ORDER

(Hybrid Mode)

06.04.2026: This application has been taken out by the Financial

Creditor (FC)/ Respondent in Comp. App. (AT) (Ins.) No. 767 of 2025,seeking

certain clarification to the order dated 13.10.2025.

2. In the Comp. App. (AT) (Ins.) No. 767 of 2025 was filed by one of the

partners of the Corporate Debtor (CD), which is an LLP,challenging the order

of the Adjudicating Authority admitting the partnership firm to CIRP.

3. During the pendency of this appeal, a settlement was entered into

between the parties on 21.08.2025.In these circumstances,this Tribunal

passed the following order:

"...2. Shri Krishnendu Datta, the learned Senior Counsel for the appellant submitted that even on 14.02.2025, the appellant had informed the Adjudicating Authority that the issue is likely to be settled. Indeed on 19.03.2025, accommodation was sought for filing the Reply. The learned Counsel added that as of now, the appellant had fully settled the Financial Creditor who initiated the CIRP. Placing reliance on Abhishek Singh, Suspended Director of Manpasand Beverages Ltd. v. Yoginkumar Ashokbhai Patel & another in [Company Appeal (AT) (Ins) No.1863 of 2024], the learned Counsel submitted that this Tribunal may set aside the Order and record settlement of the case and close the Order admitting the CIRP.

3. The learned Counsel for the respondents/Financial Creditors submitted that their dues have been settled.

4. There are two aspects to this Appeal: (a) That whether CIRP may have to be closed as was done in CA 1863 of 2024; (b) and if it is not so closed, what should be the Order on merit.

5. So far as the second question is concerned, on perusing the papers, we are of the opinion that the appellant in effect had not been heard onmerits and deserves an opportunity. Necessarily the Order of the Adjudicating Authority may have to be set aside. The next issue is should this Tribunal record the settlement between the parties and terminate the CIRP, since, with our decision to set aside the Order of the Adjudicating Authority, the case is relegated to a stage prior to the admission of the CD to CIRP.

6. Since, the CIRP has commenced, it is conceivable that the IRP might have received some claims, and hence those claims, if any, cannot be ignored. Then it will may well be a case where the it may have to be decided how to go about the matter in the light of the

I.A. No. 869 of 2026 in Comp. App. (AT) (Ins.) 767 of 2025 2 of 4 ratio in Glas Trust Company. LLC Vs Byju Raveendran & Others [(2025)3 SCC 625] Therefore, it would only be appropriate that the matter is remanded back to the Adjudicating Authority to deal with the issue of settlement as per law.

7. In conclusion, the Appeal is allowed and the Order of the Adjudicating Authority dated 08.05.2025 in C.P. (I.B) No.539/MB/2024 is set aside and the matter is remanded back to the Adjudicating Authority. The parties are free to move the Adjudicating Authority with their plea of settlement. No costs."

4. The learned counsel for the applicant submits that paragraph 2 of the

order does not disclose the settlement document dated 21.08.2025,though it

is an admitted fact.This Tribunal has not applied its mind to the merits of

the appeal nor hasit taken upon itself the responsibility to work outthe

remedy for the respondent under Section 12Aroute, but has only required

the appellant/Respondent in this application to move the Adjudicating

Authority with a plea of settlement. However, in the concluding paragraph

No. 7 it is stated that the appeal is allowed, which in the context, may not be

correct.

5. Learned counsel for the respondent, however, submits that the appeal

came to be allowed based on a statement made by the applicant herein.

6. We assessedthe rival submissions. Once theCD has been admitted to

CIRP, the rules regarding settlement and withdrawal of the CIRP

aregoverned and guided by the principleslaiddown by the Hon'ble Supreme

Court in Glas Trust Company LLC Vs Byju Raveendran & Others

I.A. No. 869 of 2026 in Comp. App. (AT) (Ins.) 767 of 2025 3 of 4 [(2025)3 SCC 625].Therefore, even assuming that the applicant hasmade

any concession before this Tribunal to allow the appeal, we may have to

state with humility that we donot have the authority to do the same.The

route to be adopted is the one prescribed under Section 12A of the IBC.In

view of this,the phrase 'the appeal is allowed'in para 7 of the order does

not fiteither with the law on the subject or with the facts. This inadvertent

error is corrected as below.

7. In conclusion, the Appeal is closed and the Order of the Adjudicating

Authority dated 08.05.2025 in C.P. (I.B) No.539/MB/2024 is set aside and

the matter is remanded back to the Adjudicating Authority. The parties are

free to move the Adjudicating Authority with their plea of settlement. In the

eventuality that the settlement process fails, the appellant is entitled to

revive the appeal. No costs.

Justice N. Seshasayee Member (Judicial)

Arun Baroka Member (Technical) rashmi/beena

I.A. No. 869 of 2026 in Comp. App. (AT) (Ins.) 767 of 2025 4 of 4