2020 (1) TMI 842 - AT - Insolvency and Bankruptcy

Constitution of Committee of Creditors - settlement agreement - HELD THAT - As the parties have reached the settlement and the Committee of Creditors was not constituted in exercise of powers conferred under Rule 11 of the NCLAT Rules 2016 we set aside the impugned order - petition disposed off - appeal allowed.

Summary

Issues involved:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Challenge to the impugned orders in Company Appeal (AT) (Insolvency) No. 909 of 2019 and Company Appeal (AT) (Insolvency) No. 929 of 2019.
3. Settlement agreements reached between the parties.
4. Payment of fees to the Interim Resolution Professional.
5. Disposal of the petitions and release of the appellant company from legal proceedings.

Analysis:
1. The judgment involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, where 'M/s. Aaarti Security Services' sought the initiation of Corporate Insolvency Resolution Process against 'M/s. Shahi Infrastructure Pvt. Ltd.' The National Company Law Tribunal admitted the application and appointed an Interim Resolution Professional, leading to a challenge in Company Appeal (AT) (Insolvency) No. 909 of 2019.

2. Another petition under Section 9 of the I&B Code was filed by 'Anupam Enterprises' against the same Corporate Debtor. The Tribunal admitted this application as well and appointed the same Interim Resolution Professional, resulting in a challenge in Company Appeal (AT) (Insolvency) No. 929 of 2019.

3. The parties reached settlement agreements in both cases. The Settlement Agreement in Company Appeal (AT) (Insolvency) No. 909 of 2019 involved a payment of Rs. 10,00,000 before the NCLAT, with a balance amount of Rs. 30,00,000 to be paid upon claim settlement by the Supreme Court. A similar settlement was reached in Company Appeal (AT) (Insolvency) No. 929 of 2019, confirming the receipt and settlement of the claim amount.

4. Regarding the fees of the Interim Resolution Professional, it was confirmed that the fees and costs had been received satisfactorily, leading to the satisfaction of the Interim Resolution Professional.

5. In light of the settlements and non-constitution of the Committee of Creditors, the impugned orders were set aside under Rule 11 of the NCLAT Rules, 2016. The petitions by the Operational Creditors were disposed of, and the Interim Resolution Professional was directed to hand over assets and records to the Board of Directors, allowing the appellant company to function independently through its Board of Directors, thereby releasing it from legal proceedings.

This comprehensive analysis covers the issues involved in the judgment, detailing the application, challenges, settlements, fee payments, and final disposal of the petitions, ensuring a thorough understanding of the legal proceedings and outcomes.