Rahul Gupta vs G Trans Logistics India Pvt Ltd & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 537 of 2020
Ratio decidendi
The rule this decision rests on
The Tribunal, having been satisfied that the operational creditor's claim has been settled and that no Committee of Creditors has yet been constituted, may take settlement terms on record under its rules and dispose of the appeal in accordance with them, where the settlement is admitted by the operational creditor and the Interim Resolution Professional raises no objection. Where the exit route from the Corporate Insolvency Resolution Process is available prior to the constitution of the Committee of Creditors, the Tribunal may, on settlement between the corporate debtor and the operational creditor, set aside the order admitting the application and commencing the process, direct closure of the proceedings before the Adjudicating Authority, and release the corporate debtor from the process so that it functions through its Board of Directors. An Interim Resolution Professional whose services are terminated at this stage is entitled to a consolidated fee fixed by the Tribunal having regard to the period of work done, expenses incurred in issuing the public announcement and other steps, and costs of appeal proceedings, with credit given for any sum already paid in advance. Where a corporate debtor fails to comply with the agreed payment terms under such a settlement, the operational creditor may apply to the Adjudicating Authority for revival or restoration of the Corporate Insolvency Resolution Process.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Rahul Gupta ...Appellant
Versus
G Trans Logistics (India) Pvt. Ltd. & Ors. ...Respondents
Present:
For Appellant: Mr. Krishnendu Datta and Mr. Puneet Singh Bindra, Advocates.
For Respondents: Ms. Radhika Rai, Advocate for R-1. Mr. Paraven Sehrawat, Advocate for R-3 (IRP) with Mr. Hardev Singh, IRP.
ORDER
(Through Virtual Mode)
11.06.2020: I. A. No. 1389 of 2020 has been moved in this appeal by the
Appellant- Director and Shareholder of the Corporate Debtor seeking to place on
record the Terms of Settlement Agreement executed between the Appellant and
the Respondent - Operational Creditor. Mr. Krishnendu Datta, Sr. Advocate
representing the Appellant submits that the claim of Respondent - 'G Trans
Logistics (India) Pvt. Ltd.' (Operational Creditor) has been settled and in terms of
the Settlement Agreement the Corporate Debtor has agreed to pay a sum of
Rs.85.00 Lakh as full and final settlement of all claims of the Operational
Creditor. Such sum is agreed to be paid in instalments as specified in the
Settlement Agreement.
-2-
2. Learned counsel for Respondent No. 1 - Operational Creditor, Ms. Radhika
Rai when confronted with this Settlement Agreement admitted execution of the
Settlement Agreement inter-se the Appellant/Corporate Debtor and the
Operational Creditor. She stated that the Operational Creditor is agreeable to
the payment of Rs.85.00 Lakhs towards full and final settlement of its claim and
resolution of all disputes in the manner and as per mode specified in the
Settlement Agreement.
3. Mr. Praveen Sehrawat, Advocate representing the Interim Resolution
Professional (Respondent No. 3) submits that the Interim Resolution Professional
has issued the public announcement but Committee of Creditors has not been
constituted so far. It is further submitted that no claim has been received as of
now.
4. In terms of dictum of Hon'ble Apex Court as laid down in 'Swiss Ribbons
Pvt. Ltd. & Anr. Vs. Union of India & Ors.', Writ Petition (Civil) No. 99/2018 (para
52) dated 25th January, 2019 (2019 SCC OnLine SC 73), the exit route from the
Corporate Insolvency Resolution Process being available prior to constitution of
Committee of Creditors, we find that this is a fit case for exercise of Rule 11 of
National Company Law Appellate Tribunal Rules, 2016 to allow the settlement
and to take Settlement Terms on record.
Company Appeal (AT) (Insolvency) No. 537 of 2020 -3-
5. We accordingly take the Settlement terms on record and dispose of the
appeal in terms of this Settlement Agreement. The impugned order dated 2nd
June, 2020 by virtue whereof the application under Section 9 preferred by
Respondent No. 1 - Operational Creditor was admitted and Corporate Insolvency
Resolution Process was commenced and all actions taken pursuant thereto are
set aside. The Adjudicating Authority (National Company Law Tribunal), New
Delhi Bench-V is directed to close the case. The Corporate Debtor is released
from the rigour of Corporate Insolvency Resolution Process and will function
through its Board of Directors. The Interim Resolution Professional will hand
over assets and records of the Corporate Debtor, immediately.
6. Mr. Praveen Sehrawat, learned counsel representing the Interim
Resolution Professional submits that Interim Resolution Professional has been
paid a fee of Rs.50,000/- by the Appellant in advance. However, having regard
to the period for which he has worked and also the expenses he has incurred for
issuing public announcement, taking other steps during the Corporate
Insolvency Resolution Process and engaging a counsel in these appeal
proceedings, we deem it appropriate to allow a consolidated amount of
Rs.1.50 Lakh inclusive of Rs.50,000 paid as fee in advance. The balance amount
of Rs.1.00 Lakh shall be paid by the Appellant within one week to the Interim
Resolution Professional.
Company Appeal (AT) (Insolvency) No. 537 of 2020 -4-
7. In the event of the Appellant/ Corporate Debtor not adhering to the terms
of the Settlement Agreement, as regards the payment in term of mode and
schedule agreed upon, it shall be open to the Operational Creditor to approach
the Adjudicating Authority for revival/ restoration of the Corporate Insolvency
Resolution Process proceedings.
8. This order be communicated to the learned Adjudicating Authority for
information and compliance. A certified copy of this order be also provided to
the parties today itself.
[Justice Bansi Lal Bhat] Acting Chairperson
[Justice Anant Bijay Singh] Member (Judicial)
[Dr. Ashok Kumar Mishra] Member (Technical) am/gc
Company Appeal (AT) (Insolvency) No. 537 of 2020
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