Settlement reached in insolvency case, interest waived, debtor to pay in installments. Legal remedies preserved.

The Operational Creditor initiated Corporate Insolvency Resolution Process under Section 9 of IBC against the Corporate Debtor for non-payment of dues. Subsequently, a Settlement Agreement was reached, with the Corporate Debtor agreeing to pay the outstanding amount in installments. The Operational Creditor waived off the interest claim and withdrew the insolvency application. The Tribunal disposed of the matter as withdrawn, emphasizing adherence to the settlement terms and allowing legal remedies in case of default by the Corporate Debtor.

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Issues:
Initiation of Corporate Insolvency Resolution Process under Section 9 of IBC, 2016 based on outstanding payments. Settlement agreement between the Operational Creditor and the Corporate Debtor leading to withdrawal of the application.

Analysis:
1. Initiation of Corporate Insolvency Resolution Process: The Operational Creditor filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for non-payment of outstanding dues amounting to Rs. 3,10,19,340/- along with interest. Despite various communications and demands, the Corporate Debtor failed to clear the dues, leading to the Operational Creditor filing the insolvency application. The Corporate Debtor acknowledged the demand but failed to make the payment, resulting in the initiation of the insolvency resolution process.

2. Settlement Agreement and Withdrawal of Application: Subsequently, the parties entered into a Deed of Settlement on 7th January, 2021, agreeing on the payment terms and resolving the outstanding dues issue. As per the settlement, the Corporate Debtor agreed to make an initial payment of Rs. 2,00,00,000/- and further payments in instalments to settle the total outstanding amount. The Operational Creditor agreed to waive off the interest claim mentioned in the insolvency petition. Following the settlement, the Operational Creditor filed a withdrawal memo on 18th January, 2021, seeking permission to withdraw the insolvency application based on the settlement agreement. The Tribunal disposed of the matter as withdrawn, directing both parties to adhere to the conditions outlined in the Deed of Settlement. It was specified that in case of default by the Corporate Debtor, the Operational Creditor could pursue appropriate legal remedies to recover the outstanding amount.

In conclusion, the judgment highlights the process of initiating corporate insolvency resolution under Section 9 of IBC, 2016 due to non-payment of dues by the Corporate Debtor, followed by a detailed settlement agreement between the parties leading to the withdrawal of the insolvency application. The Tribunal emphasized the importance of honoring the terms of the settlement and outlined the recourse available in case of any default by the Corporate Debtor.

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