Parvinder Singh vs Intec Capital Ltd. & Anr

Parvinder Singh ...Appellant

Vs

Intec Capital Ltd. & Anr. ...Respondents

Present:

For Appellant: Ms. Amrita Mishra, Advocate.

For Respondents: Mr. Vinod Chaurasia, Advocate for IRP. Mr. Piyush Moona, IRP.

ORDER

06.12.2019: 'M/s Intec Capital Ltd.' (Financial Creditor) moved

application under Section 7 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as 'I&B Code') for initiation of Corporate Insolvency

Resolution Process against 'M/s Jagtar Singh and Sons Hydraulics Private

Limited' (Corporate Debtor). The Adjudicating Authority (National Company

Law Tribunal), New Delhi Bench - III by impugned order dated 3rd September,

2019 admitted the application.

2. Mr. Parvinder Singh, Authorised Representative of the Promoter of the

Corporate Debtor preferred appeal against the said order. On 19th September, -2-

2019, while the Appellant was substituted, learned counsel for the Appellant

submitted that the Appellant on behalf of the Promoters is ready to settle the

claim of the Financial Creditor. If necessary, they are ready to move before a

'Mediator', who may be appointed by this Appellate Tribunal. It was also

submitted that Committee of Creditors has not been constituted till date.

3. For the said reason, the Interim Resolution Professional was while

directed to ensure that the Corporate Debtor remains a going concern, also

directed not to constitute Committee of Creditors, if not constituted, to enable

the parties to reach amicable settlement.

4. Mr. Ketan Madan, learned counsel appearing on behalf of the

Respondent - 'Intec Capital Ltd.' agreed for mediation and the matter was

referred to Hon'ble Mr. Justice (Retd.) A. K. Sikri, Former Judge of the Hon'ble

Supreme Court for mediation.

5. Hon'ble Mr. Justice (Retd.) A. K. Sikri, Former Judge of the Hon'ble

Supreme Court forwarded the Mediation Report dated 2nd December, 2019

enclosing the Settlement Terms, as extracted below:-

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6. The Hon'ble Mediator has also forwarded copy of post-dated cheques

which were issued in the name of 'M/s Intec Capital Ltd.', which are as

follows:-

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7. This Appellate Tribunal directed the Appellant to file affidavit on behalf of

the Promoter of the Corporate Debtor giving undertaking that the post-dated

cheques will be encashed on presentation and they will not be defaulted. An

affidavit has been filed by the Appellant on behalf of the Promoter to that effect.

It is stated that on default of any of the cheques, 'Parvinder Singh' (Appellant)

and the Promoter will be personally liable.

8. The aforesaid post-dated cheques are being handed over to Mr. Ketan

Madan, learned counsel for 'Intec Capital Ltd.' for onward transmission to the

Respondent - Financial Creditor.

9. Interim Resolution Professional has worked for about three months. He was

also present before the Hon'ble Mediator and his fee and cost has been

determined in the Settlement Terms. Therefore, he will be entitled for the same.

Mr. Piyush Moona, Interim Resolution Professional, who is present before this

Appellate Tribunal will receive the amount in terms of the Settlement Terms.

10. In the fact and circumstances, in the light of decision of Hon'ble

Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India &

Ors.', Writ Petition (Civil) No. 99/2018, reported in 2019 SCC OnLine SC

73 and in exercise of power conferred under Rule 11 of NCLAT Rules, 2016, we

set aside impugned order dated 3rd September, 2019 passed by the

Adjudicating Authority initiating Corporate Insolvency Resolution Process

against 'M/s Jagtar Singh and Sons Hydraulics Private Limited' conditionally,

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subject to the compliance of the Terms of Settlement by the end of August,

2020.

11. Terms of Settlement as recorded by the Hon'ble Mediator should be

treated to be order and direction of this Appellate Tribunal to be complied by

all the parties including the Promoters of 'M/s Jagtar Singh and Sons

Hydraulics Private Limited' (Corporate Debtor); Parvinder Singh, Authorized

Representative; Intec Capital Ltd. And Interim Resolution Professional. In the

present, whole process practically stands suspended for compliance of the

Terms of Settlement. The Corporate Insolvency Resolution Process can be

revived by the Petitioner in case of breach of Terms of Settlement or default of

any post-dated cheque. On completion of compliance of terms and conditions,

the application under Section 7 will be deemed to have been withdrawn by

'Intec Capital Ltd.', otherwise the order setting aside the impugned order dated

3rd September, 2019 shall stand recalled and the Corporate Insolvency

Resolution Process will continue. The Interim Resolution Professional may

allow the Promoters/ Board of Directors to run the Corporate Debtor through

Board of Directors. However, the Appellant, the Corporate Debtor, its

Directors, Officers, Employees will not sell, alienate, transfer or create third

party encumbrance on any of the movable or immovable property of the

Corporate Debtor during the period Terms of Settlement are complied.

12. The Corporate Debtor may incur expenditure required for keeping the

Company going concern, that is, for payment of salaries/wages of Directors;

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Officers; employees'; workmen; current bills of the suppliers, electricity/water

bills etc. However, it will not transfer any amount in favour of any shareholder

or related party till the compliance.

13. It will be open to the parties to file appropriate application in this appeal

for revival of the matter, in case of default.

14. The appeal stands disposed of with aforesaid observations and

directions. No costs.

15. Let the Mediation Report filed by the Hon'ble Mediator be kept in a sealed

cover alongwith the record.

16. Let the disposed of appeal be listed for reporting of compliance on

7th September, 2020.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice Bansi Lal Bhat] Member (Judicial)

[Justice Venugopal M.] Member (Judicial)

am/gc

Company Appeal (AT) (Insolvency) No. 968 of 2019