Case Law Details
Bhagwandas R. Bhattad Vs R. M. Bhuther and Company Ltd (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT) passed a pivotal judgment in the case of Bhagwandas R. Bhattad Vs R. M. Bhuther and Company Ltd. The dispute revolved around a breach of consent terms, the payment of the principal amount and interest, and the continuation of the Corporate Insolvency Resolution Process (CIRP).
Analysis: In the proceedings, a key development was the consent terms agreed upon by both parties on 30.06.2021, subsequently breached by the Corporate Debtor. The Financial Creditor then revived the Section 7 application, leading to its admittance. During the appeal, the Appellant was ordered to deposit an amount of Rs. 1,71,80,263/-, which was fulfilled according to the appellant. The principal amount plus interest having been paid, the NCLAT saw no reason to continue the CIRP against the Corporate Debtor. However, a conflict arose over the total due amount per the Consent Terms, leading to the Financial Creditor being granted permission to recover the remaining amount via lawful means.
Conclusion: The NCLAT judgment reiterates the importance of honouring consent terms. Furthermore, it highlights that, once the principal amount and interest are paid, the CIRP does not need to continue. This precedent creates a critical reference point for future cases, where parties have breached consent terms, and the remaining due amount becomes a matter of dispute.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
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