Section 7 IBC petition not admitted where settlement was progressing and remaining creditor claims were directed to be resolved.

A Section 7 IBC petition was not admitted where the financial creditor and corporate debtor filed a joint consent settlement and the record showed substantial progress in resolving creditor claims. Because insolvency proceedings are summary in nature, the Tribunal did not undertake a detailed examination of individual claims and instead treated the ongoing settlement process as the decisive factor. The petition was disposed of with directions to complete settlement of the remaining claims within three months, rather than triggering CIRP.

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Issues: Whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 should be admitted when the parties have entered into a settlement and the corporate debtor is shown to be actively settling the remaining claims.

Analysis: The petitioning financial creditor and the corporate debtor placed a joint consent settlement before the Tribunal. The record showed substantial progress in settlement of claims, including settlement of a large number of creditors and ongoing steps to resolve the remaining claims. Since proceedings under the Code are summary in nature and the admitted position was that the settlement process was progressing in earnest, the Tribunal declined to examine individual claims in detail and instead disposed of the petition with directions to complete the settlement within a fixed time.

Conclusion: The petition was not admitted for CIRP and was disposed of with a direction to the corporate debtor to settle the remaining claims within three months.

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