Pre-admission settlement can undo insolvency admission where the appeal remains a continuation of original proceedings.

A settlement reached before appellate disposal of a Section 9 insolvency admission can be considered in continuation of the original proceedings, even if the adjudicating authority did not act on it. Where the parties place the settlement on record, the basis for continuing CIRP falls away and the insolvency objective of preserving the corporate debtor as a going concern is served. On that footing, the admission order and commencement of CIRP were quashed and the matter was disposed of in terms of the settlement.

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Issues: Whether the appeal against admission of the Section 9 insolvency application and initiation of CIRP could be allowed on the basis of a settlement arrived at between the operational creditor and the corporate debtor before the appellate decision.

Analysis: The parties placed the settlement agreement on record and both sides ed that it had been executed before the CIRP order. Since the company appeal is a continuation of the original proceedings, the appellate forum could take cognizance of the settlement even if it was not acted upon by the adjudicating authority. A settlement reached before the order admitting the Section 9 application removes the basis for continuing CIRP and serves the insolvency objective of preserving the corporate debtor as a going concern.

Conclusion: The appeal was allowed, the order admitting the Section 9 application and commencing CIRP was quashed, and the matter was disposed of in terms of the settlement.

Final Conclusion: The insolvency admission order ceased to operate because the dispute stood settled before the appellate disposal, and the corporate debtor was relieved from CIRP on the strength of the recorded settlement.

Ratio Decidendi: A settlement arrived at before appellate disposal can be taken into account to set aside an admitted Section 9 insolvency proceeding and terminate CIRP, since the appeal remains a continuation of the original proceedings.

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