2021 (1) TMI 144 - Tri - Insolvency and Bankruptcy

Tribunal promotes amicable settlements in insolvency cases, emphasizing fairness and resolution

The National Company Law Tribunal disposed of a petition seeking to initiate Corporate Insolvency Resolution Process against a corporate debtor for ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Since the Instant Company Petition is at admission stage, and the Parties are willing to settle the issue in question, we are inclined to dispose of the Company Petition by directing the Parties to settle the issue, as proposed, by granting liberty to the Petitioner to file fresh Company Petition case, in case, the Respondent failed to settle the issue in question. Petition disposed off. Issues:Initiation of Corporate Insolvency Resolution Process under Section 9 of the IBC based on default in payment by the Corporate Debtor.Analysis:The case involved a petition filed by M/s. Kunal Conchem Private Limited seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. CK Infra Equipment Private Limited for defaulting on a principal amount of Rs. 22,87,583 along with interest. The Petitioner provided construction chemicals to the Respondent for a project in Andhra Pradesh, with payment terms of 30 days. Despite commitments to clear the dues, the Respondent failed to make payments, leading to a demand notice and subsequent default. The Petitioner approached the National Company Law Tribunal seeking resolution under the IBC.The Tribunal, comprising Members Rajeswara Rao Vittanala and Ashutosh Chandra, heard arguments from both parties' counsels, S. Simhadutta for the Petitioner and S.J. Sanghvi for the Respondent. The Petitioner's counsel informed the Tribunal that the notice had been served on the Respondent, who expressed willingness to settle the matter. Considering the early stage of the petition and the parties' willingness to resolve the issue, the Tribunal decided to dispose of the petition, directing the parties to settle the matter amicably. The Petitioner was granted liberty to file a fresh petition if the Respondent failed to resolve the issue, with no order as to costs.In conclusion, the Tribunal's judgment emphasized the importance of allowing parties to settle disputes amicably, especially at the initial stages of insolvency proceedings. The decision to dispose of the petition while granting the Petitioner the option to refile in case of non-settlement highlights the Tribunal's approach to encourage resolution before formal legal proceedings. The judgment reflects the Tribunal's adherence to procedural fairness and the principles of the Insolvency and Bankruptcy Code in handling insolvency matters.