Lal Chand Morani Vs Satyendra Prasad Khornia & Ors. (NCLAT Delhi)
National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal filed by Lal Chand Morani against an order that initiated the Corporate Insolvency Resolution Process (CIRP) against him. The tribunal, however, provided a path for the appellant to seek a withdrawal of the insolvency proceedings by filing an application under Section 12A of the Insolvency and Bankruptcy Code (IBC).
The case originated from a Section 7 application filed by Kotak Mahindra Bank Limited with the Adjudicating Authority. The authority, in its order dated February 4, 2025, found that a debt and default had been established, leading to the admission of the application and the appointment of an Interim Resolution Professional (IRP). Lal Chand Morani, a suspended director, appealed this decision to the NCLAT. During the appellate proceedings, the appellant indicated a willingness to settle the debt. HDFC Bank, another financial creditor, was also permitted to intervene in the case.
The NCLAT noted on several occasions that no formal settlement had been presented. During the final hearing, the appellant’s counsel informed the tribunal that a settlement proposal had been submitted to Kotak Mahindra Bank, which was under consideration. However, the counsel for HDFC Bank stated that they had already rejected a similar proposal the previous night and had informed the appellant of their decision.
