The NCLAT dismissed the challenge to the admission of the Section 7 application in insolvency proceedings, allowing the withdrawal of the appeal and the release of the fixed deposit.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench led by Justice Rakesh Kumar Jain (Judicial Member) and Technical Members Mr. Naresh Salecha and Mr. Indevar Pandey reviewed an appeal and held that the appellant's appeal against the admission of the Section 7 application was dismissed as withdrawn, and the ₹10 crore fixed deposit was ordered to be released to the appellant, recognizing the absence of a settlement between the parties despite attempts to negotiate. The court emphasized that without any settlement or compelling reasons to continue, the appeal could not be maintained, allowing the return of the deposit as per the appellant's request.
The appeal was directed against the order dated 02.11.2023, passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for the resolution of an amount of ₹37,51,64,939. During the preliminary hearing on 05.12.2023, the appellant's counsel informed the court that a settlement for ₹42 crores had been discussed but no formal agreement had been reached, preventing any payment. The appellant expressed readiness to deposit ₹10 crores in a fixed deposit receipt with the NCLAT within a week and intended to negotiate a settlement with the financial creditor.
Subsequently, the NCLAT issued a notice to the respondents, allowing two weeks for replies and stating that the Committee of Creditors (CoC) would not be constituted during this period. The appellant filed an application for condonation of a seven-day delay in depositing the ₹10 crore, which was granted, and the deposit was made on 22.12.2023. As the parties continued to request adjournments for settlement discussions, the matter was repeatedly postponed.
On 28.08.2024, the NCLAT noted that no settlement had been reached and scheduled the matter for arguments. The appellant's counsel attempted to argue the appeal based on subsequent developments but was unable to convince the court. Consequently, the appellant requested to withdraw the appeal and sought the return of the ₹10 crore deposited. The respondent's counsel did not raise any objections to this request. The NCLAT dismissed the appeal as withdrawn and directed the release of the ₹10 crore fixed deposit receipt to the appellant’s counsel within two weeks, concluding the proceedings.
Mr. Chitranshul A. Sinha, Ms. Meghna Rao, Mr. Dhaval Deshpande and Mr. Harshit Goel, Advocates represented the Appellant.
Mr. Krishnendu Datta, Sr. Adv. with Mr. Puneet Singh Bindra, Mr. Parag Sawan, Mr. Rishabh Gupta and Ms. Alina Merin Mathew, Advocates appeared for Respondent.
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