Skip to main content

Failure or Breach of settlement agreement can't be a ground to CRP under the Insolvency Code

Cause Title : Bajaj Rubber Company Private Limited vs Saraswati Timber Private Limited, Company Petition No. (IB)-1441(ND)/2018, NCLT New Delhi

Date of Judgment/Order : 11.08.2022

Corum : Sh. Dharminder Singh (Judicial), Sh. L. N. Gupta (Technical)

Citied: 

  1. M/s. Alhuwalia Contracts (India) Ltd. vs. M/s. Logix Infratech Private Limited in (IB)882/ND/2022, NCLT New Delhi
  2. M/s Delhi Control Devices (P) Limited Vs. M/s Fedders Electric and Engineering Ltd., Company Petition (IB) No. 343/ALD/2018, NCLT Allahabad Bench
  3. Nitin Gupta vs Internationa Land Developers Private Limited., IB No. 507/ND/2020, NCLT Allahabad Bench

Background

M/s Bajaj Rubber Company Private Limited as the Operational Creditor, had filed an application  for initiation of CIR against the Corporate Debtor M/s. Ace Footmark Private Limited. The Operational Creditor had withdrawn the aforesaid Application on the ground of settlement between the Parties. Pursuant to the settlement post dated cheques were issued to the Applicant by the Corporate Debtor, many cheques got dishonoured. The Applicant has sought revival of the present application on the ground of breach of terms and conditions of the Settlement Agreement.

Judgment

Referring to the above judgments the bench held that as per the definition, Operational Debt means a claim in respect of provision of goods or services including employment. However, unpaid instalment as per the settlement agreement cannot be treated as operational debt as per Section 5 (21) of IBC. The failure or Breach of settlement agreement can't be a ground to trigger CRP against Corporate Debtor under the provision of IBC 2016 and remedy may lie elsewhere not necessarily before the Adjudicating Authority.

Comments

Post a Comment

Most viewed this month

Partition proceedings are vitiated even if single co-sharer is not made party or is not served in accordance with law

Cause Title :  Bhagwant Singh vs  Financial Commissioner (Appeals) Punjab, Chandigarh,  CWP-2132-2018 (O&M), High Court Of Punjab & Haryana At Chandigarh Date of Judgment/Order : 31.08.2022 Corum : Hon’ble Mr. Justice Sudhir Mittal Background A large parcel of land was owned by the Nagar Panchayat. Thereafter, some of the co-sharers sold their shares to third parties including the petitioners herein. On 22.11.1995, respondents No.3 to 5 filed an application for partition of the land. The petitioners were not impleaded as parties.  On completion of proceedings, sanad was issued on 28.08.1996. Vide two separate sale deeds dated 28.05.2008 respondents No.3 and 5 sold some portion in favour of respondent No.6 and 7. These respondents sought implementation of the sanad resulting in issuance of warrants of possession dated 05.06.2008. Allegedly, it was then that the petitioners realized that joint land had been partitioned and that proceedings h...
Post a Comment
Read more

Power of Attorney holder can also file cheque bounce cases: Supreme Court

The Supreme Court has held that a criminal complaint in a cheque bounce case can be filed and pursued by a person who holds a power of attorney (PoA) on behalf of the complainant. A three-judge bench headed by Chief Justice P Sathasivam gave the "authoritative" pronouncement on the issue, referred to it by a division bench in view of conflicting judgements of some high courts and the apex court. "We are of the view that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the Negotiable Instruments Act (which deals with cheque bounce cases)," the bench, also comprising justices Ranjana Prakash Desai and Ranjan Gogoi, said. The bench, in its judgement, said, "...we clarify the position and answer the questions in the following manner: "Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal...
1 comment
Read more

Christian who reconverts as Hindu SC will get quota benefits

Amid the controversy over “ghar wapsi”, the Supreme Court on Thursday ruled that a person who “reconverts” from Christianity to Hinduism shall be entitled to reservation benefits if his forefathers belonged to a Scheduled Caste and the community accepts him after “reconversion”. Citing articles by B R Ambedkar and James Massey, and reports by Mandal Commission and Chinappa Commission, the court said: “There has been detailed study to indicate the Scheduled Caste persons belonging to Hindu religion, who had embraced Christianity with some kind of hope or aspiration, have remained socially, educationally and economically backward.” The bench of Justices Dipak Misra and V Gopala Gowda held that a person shall not be deprived of reservation benefits if he decides to “reconvert” to Hinduism and adopts the caste that his forefathers originally belonged to just because he was born to Christian parents or has a Christian spouse. Expanding the scope of a previous Constitution benc...
1 comment
Read more