Financial creditor's appeal revived after corporate debtor's settlement cheques dishonoured under Section 7 application

The NCLAT Principal Bench allowed a financial creditor's application to revive a company appeal after the corporate debtor's settlement cheques were dishonoured. The Tribunal found that the corporate debtor failed to honour the settlement agreement that led to closure of the Section 7 application and was deliberately delaying proceedings on untenable grounds. The NCLAT exercised liberty granted in its earlier order dated 11.02.2020 to revive the appeal, concluding the corporate debtor's conduct demonstrated intent to delay rather than genuinely resolve the matter.

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Issues involved: Application for recall of order setting aside Corporate Insolvency Resolution Process.

Issue (i): Admission of application by Adjudicating Authority under section 7.

The Financial Creditor filed an application against the Corporate Debtor under section 7 claiming a financial debt, which was admitted by the Adjudicating Authority.

Issue (ii): Filing of Company Appeal challenging the Adjudicating Authority's order.

Viveck Goel, the Suspended Director of the Corporate Debtor, filed Company Appeal (AT) (Ins.) No.152 of 2020 challenging the Adjudicating Authority's order.

Issue (iii): Withdrawal of Section 7 application.

The Financial Creditor filed an application for withdrawal of the Section 7 application before the Adjudicating Authority, which was mentioned during the Appeal proceedings.

Issue (iv): Setting aside of Corporate Insolvency Resolution Process.

The Tribunal set aside the Corporate Insolvency Resolution Process of the Corporate Debtor based on the Adjudicating Authority's order dismissing the Section 7 application as withdrawn.

Issue (v): Dishonour of post-dated cheques.

The Financial Creditor filed an application based on the dishonour of post-dated cheques by the Corporate Debtor, seeking to recall the order setting aside the Corporate Insolvency Resolution Process.

Issue (vi): Revival of Section 7 application.

The Financial Creditor filed I.A. No. 1124 of 2021 for revival of the Section 7 application, which was initially dismissed but later allowed by the Appellate Tribunal.

Issue (vii): Appeal filed by Corporate Debtor.

The Corporate Debtor filed an appeal against the Appellate Tribunal's order, which was dismissed by the Hon'ble Supreme Court.

Issue (viii): Application for recall based on dishonoured cheques.

The Financial Creditor filed an application for recall based on the dishonour of post-dated cheques by the Corporate Debtor, as permitted by the Tribunal's earlier order.

Issue (ix): Opposition to the application.

The Appellant opposed the application for recall, citing an appeal filed before the Hon'ble Supreme Court and denying the dishonour of cheques without providing a clear denial.

In conclusion, the Tribunal allowed the application for recall, reviving the Company Appeal and imposing a cost on the Appellant for delaying the proceedings.

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