2022 (1) TMI 572 - Tri - Companies Law

Revival of petition - wilful breach - settlement of disputes between the parties - HELD THAT - It is seen from the records that the present Application for revival of the main Company Petition was filed before this Tribunal on 10.07.2018 and from thereon the Corporate Debtor has sought numerous adjournments by paying a paltry sum towards the dues of the Operational Creditor in each and every hearing. Further it is seen from the Order of this Tribunal dated 17.09.2020 a last opportunity was given to the Corporate Debtor to pay a sum of 17.5 million Japanese Yen to the Operational Creditor within a period of four weeks thereof. However it is seen that the Corporate Debtor was also not able to adhere to the said timeline even after expiry of a period of one year. All these facts would go on to show that the Corporate Debtor has violated the terms of the Settlement Agreement as entered into between the parties dated 25.07.2017. In the circumstances this Tribunal deem it fit to restore the main Company Petition viz. TCP/141/2017 on the file of this Tribunal. Accordingly TCP/141/2017 stands revived and being listed for hearing on 08.02.2022. Let the same be listed along with TCP/141/2017 on 08.02.2022.

Summary

Issues involved:
1. Application for revival of the main Company Petition (TCP/141/2017) under Rule 11 of NCLT Rules, 2016.
2. Application for contempt under Section 245 of the Companies Act, 2013 r/w Rule 11 of NCLT Rules, 2016.

Analysis:
1. Revival of the main Company Petition (TCP/141/2017):
The Operational Creditor filed MA/258/2018 seeking to revive TCP/141/2017 after the Corporate Debtor failed to adhere to the terms of the Settlement Agreement dated 25.07.2017. The Tribunal noted that despite multiple adjournments and opportunities given to the Corporate Debtor to make payments, it consistently failed to meet its obligations. The Tribunal, considering the Corporate Debtor's persistent default, deemed it appropriate to restore TCP/141/2017 on its file, indicating a clear violation of the Settlement Agreement. Consequently, TCP/141/2017 was revived and scheduled for a hearing on 08.02.2022, leading to the closure of MA/258/2018.

2. Contempt Application (MA/259/2018):
The Operational Creditor also filed MA/259/2018 seeking to hold the Corporate Debtor in contempt for willful breach of the Order dated 10.08.2017 passed by the Tribunal. The Operational Creditor argued that the Corporate Debtor not only defaulted on the agreed payments but also disregarded the Tribunal's previous order. The Tribunal acknowledged the Corporate Debtor's failure to comply with the Settlement Agreement terms and the subsequent order, leading to the decision to list the Contempt Application along with TCP/141/2017 on 08.02.2022. Moreover, the interim order restraining the Corporate Debtor from selling certain land without permission was upheld until the final disposal of TCP/141/2017, emphasizing the seriousness of the situation and the need for compliance with legal obligations.