Mr. D.S. Reddy vs Eco Drilling Fluids Pvt. Ltd. & Ors
- CitationCompany Appeal (AT) (Ins) No.96 of 2020
Ratio decidendi
The rule this decision rests on
The Tribunal, exercising its power under Rule 11 of the NCLAT Rules, 2016, will accept a withdrawal of an operational creditor's Section 9 application where the parties have settled the dispute and the operational creditor has received the full amount due, and in doing so will set aside the admission order and the consequent insolvency steps taken by the interim resolution professional, releasing the corporate debtor to function through its Board, subject to the Adjudicating Authority's determination and approval of reasonable CIRP costs and fees payable by the corporate debtor to the IRP.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order dated 06.01.2020 passed by National Company Law Tribunal, New Delhi (Court No.IV) in Company Petition No.IB-1584/ND/2019]
IN THE MATTER OF: Before NCLT Before NCLAT
Mr. D.S. Reddy .... Appellant Partner, DSTR Infrastructure & Projects LLP, L II-143B LIG Flat Kalkaji New Delhi South Delhi DL 110019
Versus
1. Eco Drilling Fluids Applicant/ Respondent No.1 Pvt. Ltd. Operational Debtor Unit No. 04, G.F., Bldg No.01, C-2 Type, Sector 2, Opp. Abbott Hotel, Vashi-Navi Mumbai-400703
2. Mr. Dharm Vir Gupta IRP Respondent No.2 Interim Resolution Professional, D-701, Antriksh Apartment, Plot No.26, Sector - 4, Dwarka, South West, Delhi - 110078
3. DSTR Infrastructure Respondent/ Respondent No.3 & Projects LLP Corporate Debtor Through Interim Resolution Professional, L II-143B LIG Flat Kalkaji New Delhi South Delhi - 110019 2
For Appellant: Shri Mukesh Rana and Ms. Mamta, Advocates
For Respondents: Ms. Shradha Agrawal, Advocate (R-1) Ms. Prachi Johri, Advocate for RP (R-2)
ORDER
03.03.2020 Respondent No.1 - Operational Creditor filed Application
under Section 9 of Insolvency and Bankruptcy Code, 2016 (IBC - in short)
before the Adjudicating Authority [National Company Law Tribunal, New
Delhi (Court No.IV)] in Company Petition No.IB-1584/ND/2019 and the same
was admitted on 6th January, 2020.
2. Against such admission of the Application, present Appeal has been
filed by Mr. D.S. Reddy, partner of the LLP - Respondent No.3 (Corporate
Debtor).
3. It is now stated that the Operational Creditor and the Appellant have
settled the dispute between the parties and on behalf of the Corporate Debtor,
payment has been made of the dues of the Operational Creditor. Advocate -
Shri Mukesh Rana refers to Application filed vide Diary No.19251 with the
Compromise Deed [Annexure - 1 (colly)]. The Advocate on behalf of the
Operational Creditor - Ms. Shradha Agrawal is present and she states that
the Operational Creditor has received all the amount of the dues and nothing
remains to be received, and wants to withdraw the Original Application.
4. The Learned Counsel for IRP (Interim Resolution Professional) states
that COC (Committee of Creditors) is yet not constituted. She states that if
the parties are settling the dispute, the CIRP (Corporate Insolvency Resolution
Company Appeal (AT) (Ins) No.96 of 2020 3
Process) costs and fees of IRP may be paid. It is stated that when the
proceeding was initiated, Rs.2 Lakhs were paid to the IRP.
5. Considering Judgement of the Hon'ble Supreme Court in the matter of
"Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors." reported as
2019 SCC OnLine SC 73, in exercise of powers under Rule 11 of National
Company Law Appellate Tribunal Rules, 2016, we accept the request made
by the Counsel for Appellant and Counsel for Respondent No.1. The request
of Respondent No.1 is that the Respondent No.1 wants to withdraw the
original Application filed under Section 9 of IBC, in view of the settlement
reached by the parties.
6.(A) For reasons stated, the Appeal is allowed.
(B) The Impugned Order is quashed and set aside. Respondent No.1 is
permitted to withdraw the original Application filed before the Adjudicating
Authority.
(C) Actions taken by IRP/RP in consequence of the Impugned Order are
quashed and set aside. The Corporate Debtor is released from the rigour of
law and is allowed to function independently through its Board of Directors.
The IRP/RP will hand back the records and management of the affairs of
Corporate Debtor, to the Board of Directors.
(D) The IRP/RP will place particulars regarding CIRP costs and balance fees
before the Adjudicating Authority. The Adjudicating Authority may consider
the same and approve reasonable CIRP costs including fees and direct the
Company Appeal (AT) (Ins) No.96 of 2020 4
Corporate Debtor to pay the same to the IRP in a time to be specified by the
learned Adjudicating Authority. In case of default, parties would be at liberty
to move this Tribunal for recall of the present Order.
The Appeal is disposed accordingly.
[Justice A.I.S. Cheema] Member (Judicial)
(Justice A.B. Singh) Member (Judicial)
[Kanthi Narahari] Member (Technical)
/rs/md
Company Appeal (AT) (Ins) No.96 of 2020
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