Tribunal Allows Withdrawal of CIRP with Settlement Agreement for Payment

The Tribunal allowed the withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated by the Operational Creditor against the Corporate Debtor under the Insolvency and Bankruptcy Code, 2016. Both parties reached a settlement agreement for the payment of Rs. 11,86,356/- by the Respondent to the Petitioner, with provisions for revival of the petition in case of default. The Tribunal directed the Respondent to comply with the settlement terms outlined in the Joint Memo and granted the Petitioner the liberty to file a fresh Company Petition if necessary.

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Issues:
Initiation of Corporate Insolvency Resolution Process under IBC, 2016, based on default amounting to Rs. 16,11,097/- by the Operational Creditor against the Corporate Debtor.

Detailed Analysis:

Issue 1: Initiation of CIRP
The case involved C.P.(IB) No.202/BB/2019 filed by the Operational Creditor seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016. The default amount in question was Rs. 16,11,097/-, including principal and interest. The case underwent multiple listing dates for admission, with adjournments granted upon parties' requests to settle the matter.

Issue 2: Settlement Agreement
Both parties, through their learned Counsels, filed a Joint Memo on 18-11-2019, proposing a settlement. The Respondent agreed to pay Rs. 11,86,356/- as a full and final settlement to the Petitioner. The settlement included issuing two cheques and reimbursing an additional sum. The parties mutually agreed to settle the matter out of court, with a provision for the Petitioner to revive the petition in case of default by the Respondent.

Issue 3: Withdrawal of Company Petition
Following the settlement agreement, the Petitioner sought to withdraw the Company Petition, subject to the Respondent honoring the cheques as per the Joint Memo. The Respondent confirmed their commitment to fulfilling the terms of the settlement. As the Company Petition was not admitted by the Adjudicating Authority and the parties had resolved the issue themselves, the Tribunal permitted the withdrawal of the petition. The Petitioner was granted liberty to file a fresh Company Petition if the Respondent failed to honor the agreed cheques.

Conclusion:
The Tribunal disposed of C.P. (IB) No. 202/BB/2019 as withdrawn, directing the Respondent to adhere strictly to the payment schedule outlined in the Joint Memo. The Petitioner retained the right to file a new Company Petition if the Respondent defaulted on the agreed payments. The judgment emphasized the importance of honoring the settlement terms and did not impose any costs in this matter.

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