Mrunal Kanubhai Patel vs Vanshita Trasport And Anr. & Ors

Mrunal Kanubhai Patel ...Appellant(s)

Versus

Vanshita Transport Through Its Proprietor Mr. Nilesh V. Thakkar & Anr. ...Respondent(s) Present: For Appellant(s) : Mr. Arun Kathpalia, Sr. Advocate with Ms. Ruby Singh Ahuja, Mr. Parth Contractor, Ms. Ravneet Kaur Malik, Ms. Varsha Himatsingka, Advocates. For Respondents : Ms. Honey Satpal, Mr. Akash Agarwalla, Mr. Aman, Ms. Tanya Gupta, Advocates. CA IP Sanjay J. Shah, for R-2/IRP. Gautam Singh.

ORDER

(Hybrid Mode) Reply filed by the Respondent. No. 2/ Interim Resolution Professional

of the CD is taken on record.

2. Heard Shri Arun Kathpalia, Ld. Sr. Counsel appearing for the Appellant,

Ms. Honey Satpal, Ld. Counsel appearing for the Respondent

No.1/Operational Creditor, and Mr. Sanjay Shah appearing for the IRP -

Respondent No. 2.

3. Instant Appeal has been preferred by the appellant, who is the

suspended director and promoter of Monte Carlo Limited (CD) challenging the

judgment and order dated 06/07/2026, passed by the National Company Law

Tribunal, Ahmedabad, Bench (Court-II) passed in CP (IB) No. 246 of 2025,

whereby the petition filed by the operational creditor, Respondent No. 1, was

accepted and the insolvency process was initiated against the CD.

CA (AT) (Ins) No. 1214 of 2026 2

4. Learned Senior Counsel appearing for the appellant submits that the

corporate debtor is a highly profitable company with a net worth of Rs. 1,962

crores and has audited net profit of Rs. 205.59 crores, Rs. 259.31 crores and

Rs. 231.30 crores in the last three financial years. It is rated as IND AA-/

Positive in the credit ratings, however, has been subject to the CIRP due to

the passing of the impugned order only for a sum of Rs. 1,47,83,503/-.

5. It is further submitted that it was on account of the collusion of one of

the employee of the appellant that the work order for procuring transportation

was given to the operational creditor at a very high price in comparison to the

established market rates of Rs. 1.69 per km and it was surfaced that the said

employee has illegally taken rupees ten lakhs from the OC for luring the

contract for him.

6. It is further submitted that there was prior dispute in the matter with

regard to the measurements and as the billing was also done on the basis that

distance was 825 km each way for the Bhagalpur route, however, a joint

physical verification was held on 17th February 2025 in the presence of the

police authorities and also in the presence of the proprietor of the Respondent

No. 1 himself, and the distance was measured as 750.2 km, which was also

corroborated by the independent GPS tracking data of approximately 763 km

as per the odometer readings and Google Maps. However, this prior dispute

has not been considered in right perspective by the Ld. Adjudicating

Authority.

7. We recall that when this appeal was first presented before us, it was

argued by Ld. Senior Counsel for the appellant that though the appellant has

a very strong case on merits, to show its bona fide the appellant is ready to

CA (AT) (Ins) No. 1214 of 2026 3

deposit the amount of ₹1,47,83,503/- with this appellate tribunal and for that

purpose, a demand draft of ₹1.50 crore has also been prepared.

8. By passing an order dated 10th July 2026, we communicated our view

to Ld. Senior Counsel, appearing for the appellant, that since the appellant is

a financially sound company and the dispute is only with regard to Rs. 1.47

crores, which may not be of any importance to the appellant, and the same

may be paid to the Respondent No. 1/ operational creditors, subject to the

final disposal of this appeal. Ld. Senior Counsel had fairly submitted that he

will take instructions in this regard. On that day this Appellate Tribunal also

directed that the IRP shall not take any action in furtherance of the impugned

order dated 6th July 2026 till the next date of listing. We also notice that a

demand draft of Rs. 1.50 crore was accordingly deposited with the registry of

this appellate tribunal.

9. We also notice that on 14th July 2026 this Appellate Tribunal has

passed the following order:

"Learned Senior Counsel appearing for the Appellant submits that the Appellant has deposited the whole of the amount pertaining to which Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was filed by the OC and this Hon'ble Tribunal has very kindly passed an interim stay order whereby the IRP has been directed not to take any further steps, but the Appellant is an infrastructure company and frequently applies for various contracts in various departments/entities and the impugned order may be taken as adverse in allotment of contracts etc. in favour of the Appellant.

In view of the fact that, in compliance of our earlier order the Demand Draft of Rs. 1.50 cr has already been deposited by the Appellant, we clarify that till further order the impugned order, shall not be taken adverse to the interest of the Appellant in allotment of any contract etc".

CA (AT) (Ins) No. 1214 of 2026 4 10. Ld. Senior Counsel, appearing for the appellant, has drawn our

attention towards a clause in the settlement agreement dated July 25, 2026.

In this clause it is stated that the operational creditor has raised certain

claims against the corporate debtor towards transportation charges stated to

be outstanding under the work orders, together with interest and GST thereon

up to the date of filing of the petition, aggregating to approximately Rs. 1.47

crore and these claims were disputed by the corporate debtor in their entirety.

Clause 4.1 of the settlement agreement is also highlighted, wherein it is stated

that the operational creditor irrevocably and unconditionally consents to the

setting aside and quashing of the impugned order and would not have any

objection. It is submitted that in furtherance of this settlement agreement the

whole of the amount which was allegedly due to the corporate debtor of the

operational creditor has been paid and the claim of the operational creditor

has been settled in full and final.

11. Ld. Counsel for the Respondent No. 1, while drawing our attention to

the Affidavit cum undertaking filed by the Respondent No. 1, submits that the

claim of the operational creditor has been amicably settled in terms of the

Settlement Agreement dated 25th July 2026 and in view of this settlement the

Respondent No. 1/Operational Creditor unconditionally consents to setting

aside and quashing the impugned order. It is submitted that the whole claim

of the OC has been satisfied and he has also received the amount of claim in

full.

12. Perusal of the affidavit filed by the Respondent No. 2, i.e. the Interim

Resolution Professional, would also fortify that after the insolvency

CA (AT) (Ins) No. 1214 of 2026 5

commencement the public announcement was issued on 8thJuly 2026 and

only one claim relating to provident fund dues was received from EPFO.

13. Ld. Counsel for the IRP is present through VC and has informed that

up to now only one claim of Rs. 2.98 lakhs of EPFO was filed and the said

claim has been settled/ paid by the corporate debtor. In this regard he has

relied on an email of date 29th July 2026 sent by the Employees Provident

Fund Organization intimating that the EPFO has received the claimed amount

from the establishment through demand draft. A copy of this email has been

taken on record. Thus it is submitted by the IRP that the only claim he

received was of EPFO and the same has been settled and as of now there is

no claim filed by any creditor.

14. Ld. Senior Counsel, appearing for the Appellant, has also placed on

record a communication dated 29th July 2026 sent by the Bank of Baroda,

indicating therein that as on date the account of the CD is running standard

and regular and there is no overdue reported in the account. On the basis of

this communication it is submitted that the CD is not in default of any

amount. The said communication placed by Ld. Senior Counsel for the

appellant for our perusal is also taken on record.

15. Having heard Ld. Counsel for the parties and having perused the

record, it is reflected that apart from the fact that parties have settled the

matter amicably it is also evident that the appellant in its pleading has

specifically contended that there was genuine prior dispute in the matter with

regard to the measurement of distance. Though the operational creditor has

filed its response, in this appeal, this contention of the appellant has not been

controverted in the said response and significantly it is stated that the

CA (AT) (Ins) No. 1214 of 2026 6

operational creditor is not having any objection if the impugned order passed

by the Ld. Adjudicating Authority is set aside or quashed.

16. We also notice that specific averments has been made by the appellant

in the appeal indicating as to how the contract has been procured by giving

bribe to one of the employee of appellant and an F.I.R. in this regard is also

stated to have been lodged against the employee. It is also stated in clause B

of the settlement agreement, which has been signed by CD and OC both that

OC raised claims against CD towards transportation charges stated to be

outstanding under the work orders together with interest and GST

aggregating to approximately Rs. 1.47 Crore were disputed by the CD in their

entirety and in clause C it is stated that OC thereafter issued a demand notice

dated 01.01.2025 which was sent on 04.01.2025. Thus on the basis of all

these facts it is submitted by Ld. Counsel for Appellant that it is a case where

the prior dispute was existing between the parties, even prior to the issuance

of notice under Section 8 of the Code and this issue has not been properly

addressed by Ld. Adjudicating Authority.

17. Ld. Senior Counsel appearing for the appellant has placed before us an

order dated 10th July 2026 passed by this appellate tribunal in CA (AT) (Ins)

No. 850 of 2026. The relevant portion of the same is reproduce as under:

3. In 'Rajeev Goyal' Vs. 'Sankalp Siddhi Developers Pvt. Ltd. & Anr.', (Comp. App. (AT) (Ins.) No. 846/2025), in similar circumstances, the CIRP was directed be closed.

The relevant paragraphs of the judgment, are as below:

"5. We have also gone through the Judgements viz "Gaurav Bhatia (Suspended Director of Bird Consultancy Services Pvt. Ltd.) Versus Smriti Bhatia & Ors.", Company Appeal (AT) (Ins) No.881 of 2025 as well as "Sachin Malde Vs. Hemant Nanji Chheda & Anr.", Company Appeal (AT) (Insolvency) No. 123 of 2024

CA (AT) (Ins) No. 1214 of 2026 7

wherein in similar circumstances, the CIRP was directed to be closed. In the said Judgement, the reference was also made to "GLAS Trust Company LLC Vs. BYJU Raveendran & Ors." Civil Appeal No. 9986 of 2024 which held in appropriate cases inherent power can be exercised to close the proceedings. In both these cited Judgements, the CIRP was directed to be closed and the Impugned Order was set aside.

6. In view of the law stated above and also the settlement arrived at between the parties and also that the only claimants have also withdrawn their claim, hence there is no impediment in closing of the CIRP. In the circumstances, the proceedings of Corporate Insolvency Resolution Process against the Corporate Debtor needs to be closed. The impugned Order is thus set aside."

4.Considering the submissions made by the learned Sr. counsels, the learned counsel for respondent No.1 and in view of the affidavits filed by the IRP and per 'Rajeev Goyal' (supra), especially considering the fact there are no claims received despite the publication of 'Form-A' for 08.05.2026, we are of the considered opinion there is no impediment in closing of the CIRP and in view of the circumstances stated above. Thus, the CIRP of M/s. Prime Focus Ltd. stands closed.

5. It is submitted by the learned Sr. counsel for the appellant in view of the above, the lien of the bank on the FDR of Rs.3,53,79,74,505/- needs to be removed and the parties shall receive the payments strictly in terms of the Discharge Agreements dated 01.07.2026. In these circumstances, the lien stands withdrawn and the money be disbursed to the parties in terms of the Discharge Agreement dated 01.07.2026.

6. The appeal is thus disposed of. Impugned order stands set aside. Pending applications are also disposed of".

18. Keeping in view all the facts and circumstances of this case we are of

the view that parties in their settlement agreement have jointly contended that

there was existence of prior dispute in this case even prior to the issuance of

notice under Section 8 of the Code. The claim of the operational creditor, on

CA (AT) (Ins) No. 1214 of 2026 8

whose application moved under Section 9, the CIRP was initiated, has also

been satisfied in full and claim of the OC/Respondent No. 1 has been fully

discharged and the OC instead of contesting has stated that he is not having

any objection if the impugned order is set aside. No other creditor has filed

the claim except EPFO, which has been discharged in full and EPFO by

sending email has admitted to have received the amount in satisfaction of

whole of its claim. Thus in our considered opinion the impugned order is liable

to be set aside not only on account of amicable settlement entered into

between the parties but also on the admission of the parties with regard to

the existence of prior dispute and the CIRP of the CD may be closed.

19. In result the appeal is allowed and the impugned order passed by the

Ld. Adjudicating Authority of date 06.07.2026 is set aside and the CIRP of the

CD is hereby closed.

20. In view of the clause 4.5 of the settlement agreement, all the costs of

the CIRP, fees and expenses of the IRP shall be borne by the CD or the

appellant as the case may be.

21. Since it is admitted by Ld. Counsel for the Respondent No.1/OC that

his whole claim has been discharged and paid in full by the CD, there is no

use of keeping the money deposited through demand draft by the Appellant.

Thus we direct Ld. Registrar to return the amount deposited through the

demand draft no. 003531 dated 10.07.2026 of Rs. 1,50,00,000/- drawn on

Axis Bank to the Appellant or his Counsel, strictly in accordance with law.

CA (AT) (Ins) No. 1214 of 2026 9

22. There is no order as to costs.

23. Pending IA's, if any, are also disposed of.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) New Delhi 03.08.2026 sr

CA (AT) (Ins) No. 1214 of 2026