Appellate Tribunal closes appeal challenging Settlement Agreement under Section 9 of IBC.

The Appellate Tribunal closed the appeal against the admission of an Application under Section 9 of the IBC based on a Settlement Agreement, as the settlement was contested to be not made by free consent. The Tribunal allowed the Appellant to deposit the claimed amount mentioned in the impugned order by Demand Draft. Subsequently, the Tribunal set aside the initial order and disposed of the appeal, refunding the deposited amount and relieving Respondent No.1 from a previous deposit directive, as compliance with the Settlement Agreement was affirmed.

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Issues:
1. Admission of Application under Section 9 of the IBC based on a Settlement Agreement.
2. Dispute regarding the claim amount in the Section 9 application.
3. Compliance with Settlement Agreement and refund of deposited amount.

Issue 1: Admission of Application under Section 9 of the IBC based on a Settlement Agreement
The Appellate Tribunal heard an appeal against an order admitting an Application under Section 9 of the IBC. The Operational Creditor filed an application for disposal of the appeal based on a settlement agreement dated 15.11.2022. However, it was contested that the settlement was not made by free consent. The Tribunal decided not to proceed with the application further, closing it without delving into the allegations made by either party, emphasizing that the law would take its course.

Issue 2: Dispute regarding the claim amount in the Section 9 application
The Appellant, in response to the impugned order, expressed readiness to deposit the claimed amount of Rs.1,07,59,307/-. The Respondent argued that the claim exceeded this amount. Considering the findings in Para 25 of the impugned order and the Appellant's offer, the Tribunal allowed the Appellant to deposit the mentioned amount by a Demand Draft. The interim order was to remain in force, with timelines set for responses and further proceedings.

Issue 3: Compliance with Settlement Agreement and refund of deposited amount
A subsequent application was filed by Respondent No.1, affirming compliance with the Settlement Agreement and requesting to abide by it. The Tribunal noted that the Settlement Agreement was voluntary and allowed the application. Consequently, the order dated 14.11.2022 was set aside, and the appeal was disposed of. The amount deposited by the Appellant was to be refunded, and Respondent No.1 was relieved from depositing Rs. 2.5 Crores as previously directed, in light of the settlement agreement being upheld.

In conclusion, the Tribunal addressed the admission of the application under Section 9 of the IBC, the dispute over the claim amount, and the compliance with the Settlement Agreement, ultimately setting aside the initial order and disposing of the appeal based on the settlement agreement's validity and voluntary nature.

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