Pre-CoC settlement in insolvency proceedings can justify withdrawal, with revival preserved if settlement terms are breached.

Where the operational creditor and corporate debtor settled their dispute before constitution of the committee of creditors, the appellate tribunal used its inherent powers to record the settlement, accept the agreed payment arrangement, and terminate the insolvency process. The section 9 admission order and consequential insolvency actions were set aside, and the proceeding was treated as withdrawn. The tribunal also preserved the operational creditor's right to seek revival of the proceedings if there is default under the settlement.

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Issues: Whether, in view of the settlement between the operational creditor and the corporate debtor, the admission order under section 9 and the consequent corporate insolvency resolution process were liable to be set aside and the proceeding treated as withdrawn.

Analysis: The settlement deed was placed on record, the parties confirmed that they had resolved their dispute, and the committee of creditors had not yet been constituted. In these circumstances, the appellate tribunal exercised its inherent powers to record the settlement, accept the agreed payment arrangement, and give effect to the parties' decision to end the insolvency proceedings. The tribunal also protected the operational creditor's right to seek revival of the proceedings in the event of default under the settlement.

Conclusion: The settlement was accepted and the insolvency admission order, along with consequential actions, was set aside; the section 9 proceeding was treated as withdrawn.

Ratio Decidendi: Where an operational creditor and corporate debtor settle their dispute before constitution of the committee of creditors, the appellate tribunal may, in exercise of inherent powers, record the settlement and terminate the insolvency proceedings, while preserving the right to revive them upon default.

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