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Judgment
O R D E R
Heard Learned Counsel for the Appellant.
This Appeal has been filed against the Order dated 19.01.2022 passed by the Adjudicating Authority in CP(IB) No. 3382/MB-IV/2019. By which Order, Application filed by the Respondent under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC in short) has been admitted.
In this Appeal, an I.A. No. 734 of 2022 has been filed by the Appellant bringing on record a Settlement dated 05th March, 2022 and it is submitted that now the Appellant has settled the matter with the Operational Creditor and has made entire payment hence this Court may record the Settlement dated 05th March, 2022 and pass such order as may it deem fit.
The Learned Counsel for the parties submits that CoC has already been constituted on 22nd February, 2022. In so far as the Order which is sought to be challenged in the Appeal, we have already referred to the Judgment of the Hon’ble Supreme Court of India in Civil Appeal No. 2839 of 2022 in the proceedings dated 16th February, 2022. The Operational Debt as claimed by the Operational Creditor, part of which was clearly admitted and submissions were raised with regard to another part. In view of the Judgment of the Hon’ble Apex Court as noted above, it was clear case of an Operational Debt hence no error was committed in admitting the Application under Section 9 of the Code. However, Settlement has been entered into between the parties on 05th March, 2022 and the CoC has been constituted prior to 05th March, 2022 i.e. on 22.02.2022, we grant liberty to the Appellant to file an appropriate Application before the Adjudicating Authority under Section 12A in the proceedings being CP (IB) No. 3382/MB-IV/2019 and Adjudicating Authority may consider the Application under Section 12A of the IBC and take appropriate steps in accordance with law.
Learned Counsel for the Appellant has placed reliance on the Judgment of the Hon’ble Supreme Court in “Swiss Ribbons Pvt. Ltd. Vs. Union of India”, (2019) 4 SCC 17 wherein paragraph 82 following has been laid down:
“It is clear that once the Code gets triggered by admission of a creditor‘s petition under Sections 7 to 9, the proceeding that is before the Adjudicating Authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case.”
Sentence on which emphasis has been made by the Learned Counsel for the Appellant is “we make it clear that at any stage where the CoC is not yet constituted, a party can approach NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement”
In view of the above observations of the Hon’ble Supreme Court, we are of the view that Appellant has to approach the NCLT by filing an Application under Section 12A of the Code for settlement with the Operational Creditor.
With the above observations, we dispose of this Appeal.