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Appellate Tribunal reverses admission order under Insolvency & Bankruptcy Code due to settlement before creditors' committee. The Appellate Tribunal set aside the order admitting the application under section 7 of the Insolvency and Bankruptcy Code, 2016, as parties reached a ...
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Appellate Tribunal reverses admission order under Insolvency & Bankruptcy Code due to settlement before creditors' committee.
The Appellate Tribunal set aside the order admitting the application under section 7 of the Insolvency and Bankruptcy Code, 2016, as parties reached a settlement before the creditors' committee was constituted. The appellant agreed to pay the interim resolution professional's fee and costs, leading to the release of the corporate debtor from legal proceedings. The corporate debtor was permitted to resume operations independently. The interim resolution professional was directed to transfer records and premises upon receiving the fees. No costs were imposed on any party.
Issues: 1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 filed by Dalmia Group Holdings against Lokhandwala Infrastructure P. Ltd. 2. Settlement reached between the parties before the constitution of the committee of creditors. 3. Appellant agreeing to pay the admitted fee and cost of the interim resolution professional.
Analysis: 1. The judgment pertains to an application filed under section 7 of the Insolvency and Bankruptcy Code, 2016 by Dalmia Group Holdings against Lokhandwala Infrastructure P. Ltd. The Adjudicating Authority, National Company Law Tribunal, Mumbai Bench, had admitted the application. However, a settlement was reached between the parties before the constitution of the committee of creditors. The appellant director/shareholder, represented by Mr. Arun Kathpalia, submitted that a terms of settlement was reached on October 10, 2019, and the written terms were signed on October 16, 2019, which was accepted by the counsel for Dalmia Group Holdings.
2. The appellant agreed to pay the admitted fee and cost of the interim resolution professional. Despite the appearance of Mr. Vikky Dang, advocate for the interim resolution professional, it was noted that no reply affidavit was required as the appellant had committed to paying the resolution cost and fee. Consequently, the Appellate Tribunal, in exercise of power conferred by rule 11 of the National Company Law Appellate Tribunal Rules, 2016, set aside the impugned order dated September 19, 2019. As a result, the corporate debtor, Lokhandwala Infrastructure P. Ltd., was released from the legal proceedings and allowed to function independently through its board of directors with immediate effect.
3. The judgment concludes by stating that the interim resolution professional will hand over the records and premises of the corporate debtor upon receiving the fee and cost. The appeal was allowed with the aforementioned observations and directions, with no costs imposed on any party involved in the matter.
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