Article 142 settlement in insolvency proceedings restores the corporate debtor while leaving creditor remedies open.

The Supreme Court recorded consent terms under Article 142 and directed that the liquidation order and the order commencing the corporate insolvency resolution process stood withdrawn or recalled, resulting in revival of the corporate debtor. It also clarified that the objecting operational creditor's claim was not finally decided and that the creditor could pursue remedies in accordance with law, including proceedings under the Insolvency and Bankruptcy Code after notice. The pending avoidance application was likewise left undecided. The matter was disposed of on the basis of the settlement, while preserving unresolved third-party disputes for independent adjudication.

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Issues: (i) Whether the consent terms could be taken on record and, on that basis, the liquidation order and the order initiating the corporate insolvency resolution process could be treated as withdrawn or recalled, resulting in revival of the company. (ii) Whether the claim of the objecting operational creditor and the pending avoidance proceedings were finally decided.

Issue (i): Whether the consent terms could be taken on record and, on that basis, the liquidation order and the order initiating the corporate insolvency resolution process could be treated as withdrawn or recalled, resulting in revival of the company.

Analysis: The consent terms were accepted and taken on record in exercise of powers under Article 142 of the Constitution of India. On that basis, the effect of the order was directed to be that both the liquidation order and the order commencing the corporate insolvency resolution process stood withdrawn or recalled, and the corporate debtor was to stand revived.

Conclusion: The consent terms were accepted, the insolvency orders were withdrawn or recalled, and the company stood revived.

Issue (ii): Whether the claim of the objecting operational creditor and the pending avoidance proceedings were finally decided.

Analysis: The objecting creditor was given liberty to pursue remedies in accordance with law, including proceedings under the Insolvency and Bankruptcy Code, 2016 after notice. The Court expressly clarified that it had not determined the disputes between that creditor and the corporate debtor, and the pending avoidance application was not adjudicated.

Conclusion: No final adjudication was made on the objecting creditor's claim or the inter se disputes.

Final Conclusion: The appeal was disposed of on the basis of the recorded consent terms, with revival of the corporate debtor and preservation of the objecting creditor's remedies in accordance with law.

Ratio Decidendi: In an appropriate case, the Court may invoke Article 142 of the Constitution of India to record settlement terms and set aside insolvency-related orders, while leaving third-party claims and unresolved disputes open for independent adjudication.

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