2022 (5) TMI 580 - Tri - Insolvency and Bankruptcy

Seeking to restore the Application - initiation of CIRP against the Corporate Debtor on the grounds that the CP filed by the Applicant was withdrawn on the basis of the Memorandum of Understanding (MoU) - HELD THAT - The contention that once the Application is revived the Applicant would be entitled to claim the entire amount mentioned in the claim petition which he cannot do in view of the fresh Memorandum of Understanding is not at all cogent. A Memorandum of Understanding came into picture only to put an end to the issue and once the parties failed to comply with the terms of the MoU the situation as before the MoU would get revived in toto. The Application is allowed restoring the main Petition.

Summary

Issues:
1. Restoration and reopening of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor based on default in complying with settlement terms.
2. Contention regarding restoration of withdrawn petition versus filing a fresh petition.
3. Interpretation of NCLT Rules regarding restoration of Company Petition.
4. Analysis of relevant case laws and their applicability to the current case.
5. Entitlement to claim amount post restoration of the petition.

Issue 1: Restoration of CIRP
The application sought to restore and reopen the CP(IB) based on default in complying with the settlement terms agreed upon in the Memorandum of Understanding (MoU). The Tribunal had earlier permitted withdrawal of the petition with the liberty to return in case of default by the Respondent. Since default occurred, the current application was filed to restore the petition.

Issue 2: Restoration vs. Fresh Petition
The Respondent's contention was that a fresh petition should be filed instead of restoring the withdrawn petition, as the MoU executed outside the Tribunal constituted a binding contract superseding earlier transactions. The Applicant argued that restoration was permissible under Rule 11 of NCLT Rules, citing a Mumbai Bench judgment allowing restoration post-recording of settlement terms.

Issue 3: NCLT Rules Interpretation
The Applicant relied on NCLT Mumbai Bench's judgment to support restoration, emphasizing the Tribunal's power under Rule 11 to restore a petition dismissed as withdrawn upon agreement between parties. This judgment countered the argument that Rule 11 couldn't be invoked without a pending application before NCLT.

Issue 4: Case Law Analysis
The Applicant referenced NCLAT New Delhi's judgment in a different case to justify seeking revival for non-compliance with settlement terms, even without explicit mention in the order. The Respondent cited unrelated case laws, including a Supreme Court judgment, which the Tribunal found irrelevant to the current dispute.

Issue 5: Claim Entitlement Post-Restoration
The Respondent argued that post-restoration, the Applicant couldn't claim the entire amount due to the fresh MoU. However, the Tribunal deemed this argument invalid, stating that non-compliance with the MoU terms would revert the situation to pre-MoU status, thereby allowing restoration of the main petition.

In conclusion, the Tribunal allowed the application, restoring the main petition based on the default in complying with the settlement terms outlined in the MoU.