2024 (9) TMI 708 - AT - IBC

Appeal Settled: CIRP Dropped After Parties Agree to Terms and Release of FDR; IRP's Fee Claim to Be Addressed Separately.

Subbaraman Anand Vilayannur, Suspended Director of Tattva & Mittal Life Spaces Pvt. Ltd. Versus Ashok Tiwari & Ors.

The NCLAT disposed of the appeal against the order admitting an application under Section 7 of the IBC, 2016, following a settlement between the parties. ... Admission of application filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 - Suspended Director of the Corporate Debtor and Financial Creditor have jointly submitted that in view of the settlement (Consent term) the impugned order may be set aside and the CIRP initiated against the Corporate Debtor may be dropped - HELD THAT:- The present appeal is disposed of and the impugned order is hereby set aside. The matter qua the claim of the IRP is being kept open for him to file an appropriate application, if so advised, before the Tribunal for redressal of his grievances - The Registrar shall release the FDR within two weeks from today to the counsel for the respondent. Issues:1. Appeal against the order admitting an application under Section 7 of the Insolvency & Bankruptcy Code, 2016.2. Deposit of initial CIRP cost by the Financial Creditor.3. Settlement between the parties and the request for setting aside the impugned order.4. Payment of amounts as per the consent terms.5. Request for payment of IRP's fee.Analysis:The judgment pertains to an appeal against the order admitting an application under Section 7 of the Insolvency & Bankruptcy Code, 2016. The Suspended Director of the Corporate Debtor filed the appeal challenging the order dated 22.02.2024, where the application by a Financial Creditor was admitted, and an Interim Resolution Professional (IRP) was appointed. The Financial Creditor was directed to deposit Rs. 5 lakhs with the IRP to cover the initial Corporate Insolvency Resolution Process (CIRP) cost.During the pendency of the appeal, the parties reached a settlement. The appellant deposited the required amount as per the court's order and further proceedings were stayed. Subsequently, the parties agreed on consent terms, which included the payment of specific amounts to the Financial Creditor and the release of a Fixed Deposit Receipt (FDR) with accrued interest. Both parties jointly requested the National Company Law Appellate Tribunal to set aside the impugned order and drop the CIRP against the Corporate Debtor.The consent terms outlined the payment of Rs.1,93,50,000/- with accrued interest to the Financial Creditor, along with the remaining amount to be handed over before the Tribunal. The Financial Creditor sought a direction for the release of the FDR within two weeks. Consequently, the appeal was disposed of, and the impugned order was set aside based on the settlement between the parties.Furthermore, the IRP requested payment of his fee exceeding Rs. 11 lakhs. The appellant contested this claim, stating that the IRP had not worked due to the stay on the order. The court allowed the IRP to file an application before the Tribunal for addressing his fee-related concerns, keeping the matter open for further resolution. The Registrar was directed to release the FDR to the counsel for the respondent within two weeks from the judgment date.