Appeal dismissed due to failure to honor settlement agreement in insolvency case

The appeal against the order admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was dismissed by the Tribunal. The Tribunal found that the Settlement Agreement between the parties was not properly executed and brought to the notice of the Adjudicating Authority. Despite acknowledging the settlement, the Operational Creditor failed to honor the agreement, leading to the filing of a claim post-settlement. As a result, the Tribunal declined to allow the Operational Creditor to withdraw the application under Section 9 of the I&B Code, and the appeal was dismissed with no costs awarded.

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Issues:
1. Appeal against order admitting application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Validity of Settlement Agreement reached between parties.
3. Submission of claim by Operational Creditor post alleged settlement.
4. Constitution of Committee of Creditors and total claimed amount.

Analysis:
1. The appeal was filed by a shareholder against the order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by an Operational Creditor. The appellant claimed that a settlement was reached between the parties before the admission of the application.

2. The Resolution Professional argued that the Settlement Agreement was an afterthought and fraudulently reached. They contended that the Operational Creditor filed a claim post the alleged settlement, indicating that the settlement was not honored. The Settlement Agreement, dated 10th December, 2018, was found to be on plain paper without proper dates below the signatures, and it was not brought to the notice of the Adjudicating Authority.

3. The Operational Creditor's counsel acknowledged the settlement on 10th December, 2018, but stated that the amount was not paid as agreed. They further argued that the agreement was not honored, leading to the Operational Creditor filing a claim with the Resolution Professional.

4. The Tribunal, after hearing both parties and examining the Settlement Agreement, noted its deficiencies and the subsequent filing of a claim by the Operational Creditor. Due to the absence of proper dates on the Agreement, and considering the circumstances, the Tribunal declined to allow the Operational Creditor to withdraw the application under Section 9 of the I&B Code. Consequently, the appeal was dismissed with no costs awarded.

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