Appeal granted, order set aside under Section 9 of Insolvency Code. Settlement reached, debtor released. Payment ordered.

The Appellate Tribunal allowed the appeal and set aside the order admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The parties had settled the claim, and the Corporate Debtor was released from the Corporate Insolvency Resolution Process. The Appellant was directed to pay the remaining sum of Rs. 1.00 lakh to the Interim Resolution Professional within 15 days. Failure to comply could result in the revival of the insolvency proceedings. The Interim Resolution Professional was instructed to hand over all records and assets of the Corporate Debtor promptly.

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Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
2. Settlement of claim between the Appellant and the Respondent.
3. Payment of fees and costs to the Interim Resolution Professional.
4. Constitution of Committee of Creditors.

Analysis:

1. The Appellate Tribunal considered an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by an Operational Creditor against a Corporate Debtor. The National Company Law Tribunal had admitted the application, leading to a challenge before the Appellate Tribunal.

2. During the proceedings, it was revealed that the Appellant and the Respondent had settled the claim. The Committee of Creditors had not been constituted at the time of settlement. The Interim Resolution Professional also confirmed that the claim had been settled and dues were paid before the constitution of the Committee of Creditors.

3. The Interim Resolution Professional raised concerns about unpaid fees and costs incurred during the process. The Appellate Tribunal assessed the total fee and cost of the Interim Resolution Professional at Rs. 3.00 lakh, out of which Rs. 2.00 lakh had already been paid. The Tribunal ordered the Appellant to pay the remaining sum of Rs. 1.00 lakh to the Interim Resolution Professional within 15 days.

4. Noting that the parties had settled the matter, the Appellate Tribunal invoked Rule 11 of NCLAT Rules, 2016, and referred to the decision of the Hon'ble Supreme Court in Swiss Ribbons (P.) Ltd. v. Union of India. Consequently, the Tribunal set aside the order passed by the Adjudicating Authority, disposed of the application under Section 9 as withdrawn, and released the Corporate Debtor from the Corporate Insolvency Resolution Process.

5. The Tribunal directed the Interim Resolution Professional to hand over all records and assets of the Corporate Debtor immediately. However, failure to pay the outstanding amount of Rs. 1.00 lakh within the specified timeframe would result in the present order being recalled, potentially leading to the revival of the Corporate Insolvency Resolution Process.

6. Ultimately, the Appeal was disposed of with the aforementioned observations and actions, bringing an end to the legal proceedings in this matter.

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