Private settlement withdrawal in insolvency cannot be recalled later without liberty to revive

A corporate insolvency resolution process withdrawn on the basis of a private settlement, without liberty to revive, cannot be recalled merely because the settlement is later alleged to have been breached. The tribunal treated the withdrawal as final, noting that the settlement was not incorporated as a tribunal-supervised arrangement and that insolvency proceedings cannot be used repeatedly as a recovery tool for non-payment under a private compromise. The application to recall the termination order was therefore not maintainable, and the termination of the insolvency proceeding remained undisturbed, leaving the applicant to pursue other remedies in law.

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Issues: Whether an application to recall the order terminating the corporate insolvency resolution process, after withdrawal of the main petition on the basis of settlement and without liberty to revive, was maintainable.

Analysis: The earlier order had terminated the corporate insolvency resolution process after the financial creditor stated that a settlement had been arrived at and the petition was withdrawn. The later application sought recall on the ground that the settlement was allegedly breached. The record showed that no liberty had been granted to revive the proceeding, and the settlement was not incorporated as a tribunal-supervised arrangement. A withdrawal simpliciter does not preserve a right to resurrect the insolvency proceeding merely because the settlement later fails. The court also noted that insolvency proceedings are not a recovery mechanism to be repeatedly invoked for non-payment under a private settlement.

Conclusion: The application for recall was not maintainable and was rightly rejected. The appeal failed.

Final Conclusion: The termination of the insolvency proceeding remained undisturbed, and the appellant was left to pursue other remedies available in law.

Ratio Decidendi: Where a corporate insolvency proceeding is withdrawn on the basis of a private settlement without liberty to revive, the tribunal cannot recall the withdrawal order merely because the settlement is later alleged to have been breached.

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