Revival of insolvency petition after failed OTS upheld, yielding valid admission of the creditor's insolvency application.

Revival of the insolvency petition after failure of an agreed One Time Settlement (OTS) was upheld where acceptance letters reserved creditor remedies on default; the tribunal applied precedent treating OTS-related acknowledgements as relevant and relied on admitted debt, dishonoured post-dated cheques, repeated unsuccessful settlements, and conduct suggesting inability or unwillingness to pay. Restoration followed applicable procedural rule and was not challenged; consequently the restored petition's admission of the creditor's insolvency application was found valid and the appeal against admission was dismissed.

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Issues: Whether the admission of the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (restored after failure of an OTS and revival of the petition) was valid and whether the restoration/revival of the petition and consequent admission were justified.

Analysis: The facts show prior admission into CIRP, subsequent withdrawal of the petition under Section 12A following an agreed OTS, and later failure of that OTS with returned/dishonoured post-dated cheques and unpaid agreed sums. The acceptance letters for the OTS expressly provided that default would result in withdrawal of concessions and entitlement of the financial creditor to recover dues, including by initiating legal or NCLT processes. Restoration of the petition was effected in accordance with the applicable procedural rule and was not challenged. The existence of admitted debt and default, combined with repeated unsuccessful settlement attempts and bounced instruments, supports restoration and revival of the original application. Prior authority treating an OTS as amounting to acknowledgement of debt was applied as relevant precedent to the facts. The conduct indicating misrepresentation and inability or unwillingness to pay under the OTS further supported revival and admission under Section 7.

Conclusion: The admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 following restoration of the petition was valid; the application was rightly admitted and the appeal against that admission is dismissed.

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