2024 (3) TMI 24

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....is Appeal has been filed by the Operational Creditor, challenging the order dated 21.08.2023, by which order, the Adjudicating Authority allowed Application under Section 12A, permitting withdrawal of Section 9 Application being CP (IB)-17/9/JPR/2022. The Appellant is aggrieved only to the extent that Adjudicating Authority while permitting withdrawal of Section 9 Application did not grant liberty to the Appellant to reapproach the Adjudicating Authority in the event of breach of Memorandum of Understanding ("MoU") dated 07.07.2023. Following prayers are made by the Appellant in the Appeal: "a) Allow the present appeal; b) Kindly, set aside the Impugned Order dated 21.08.2023 to the extent it does not grant liberty to the Appellant to approach the Hon'ble Adjudicating Authority in the event of breach of the Memorandum of Understanding dated 07.07.2023. c) Pass any other appropriate orders as the Hon'ble Appellate Tribunal deems fit." 2. Brief facts of the case are that Section 9 Application was filed by the Operational Creditor, claiming default of operational debt amounting to Rs.1,85,00,668/- plus interest @ 12.75% from 07.11.2021 till the repayment ....

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....plication has been filed under Section 12A of the Code, 2016 whereby the Applicant with his prudence and knowledge agreed to the withdrawal as the dues have been satisfied between the parties therefore, we are inclined not to grant any further liberty to the Applicant to re-approach this Adjudicating Authority. for the cause of action against the same Corporate Debtor for the purposes of recovery of its operational dues (Emphasis Supplied)" 8. The Adjudicating Authority in the above order has observed that the Applicant has undertaken not to pursue this matter on the basis of the settlement reached between the parties. We, thus, have to look into the MoU to find out as to what was undertaken by the Operational Creditor. In the MoU dated 07.07.2023, which is filed at Annexure A-3, after noticing few facts, the parties under the MoU entered into following terms and conditions: "NOW THE MOU WITNESSETH AS UNDER: 1. That the Second Party has agreed to pay a total amount of Rs.1,85,00,000/- (Rupees One Crores Eighty Five Lakhs only) to the First Party towards full and final settlement of all its claims towards it. Against the claimed amount following payments have be....

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....of each of the Parties. IN WITNES WHEREOF both the parties have executed this MoU on the 7th day of July 2023 as mentioned above in the presence of witnesses mentioned hereinafter." 9. When we look into the MoU, Clause-2 of the MoU only states that both the parties undertake and agree that after execution of the MoU, the parties shall jointly file an application with the approval of the Committee of Creditors ("CoC") for withdrawal/ closure of Corporate Insolvency Resolution Process ("CIRP"). There was no undertaking by the Operational Creditor that Operational Creditor shall not pursue this matter on the basis of settlement reached between the parties. What was undertaken that in view of the settlement between the parties an application shall be filed for withdrawal/ closure of CIRP. The said settlement made in paragraph-2 of the terms and conditions as noted above did not deal with any future contingencies, which would arise in future, nor Operational Creditor relinquished any of its right arising out of its subsequent event. We, thus, are of the view that very basis of denial to grant further liberty to the Appellant to reapproach the Adjudicating Authority was falla....

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....lenged. This Tribunal, noticing the prayer made in the Application filed by the Applicant, where specific liberty was prayed for to resume the CIRP in case of non-compliance of terms of OTS, has allowed the Appeal and modified the order of Adjudicating Authority while granting the liberty to revive the CIRP. 12. In the MoU, between the parties, neither there was any specific prayer made for revival of the CIRP, nor there was any statement that Operational Creditor has relinquished its right to revive the CIRP. The learned Counsel for the Respondent has relied on judgment of this Tribunal in Amrit Kumar Agrawal vs. Tempo Appliances Pvt. Ltd. - (2020) SCC OnLine NCLAT 1202. In the said case, Section 7 Application was dismissed on the ground of default in payment of Settlement Agreement holding that the debt does not come under the definition of financial debt. In the above case, MoU was entered on 22.09.2017 between the Appellant and the Principal Borrower, where Respondent stood as Guarantor. Since, cheques issued by Principal Borrower, were dis-honoured on presentation, the Respondent as guarantor came forward to pay the outstanding amount of Rs.86 lakhs with interest and issued....