Case Law Details
Agson Global Private Limited Vs Prodalim B.V (NCLT Delhi)
NCLT Delhi’s landmark judgment in Agson Global vs. Prodalim B.V clarifies its role in settlement payments. Breach doesn’t trigger CIRP. Full order text included.
NCLT cannot stand as a sentinel/ guardian, and is not bound to observe every Settlement payment agreed between the parties
Introduction: The National Company Law Tribunal (NCLT), New Delhi Bench III, in the case of “Prodalim BV Vs. Agson Global Pvt Ltd,” has delivered a significant judgment on December 7, 2023. The ruling clarifies that the NCLT cannot act as a guardian for every settlement payment agreed between parties and emphasizes that a mere breach of a settlement agreement does not trigger the initiation of the Corporate Insolvency Resolution Process (CIRP).
Case Background: During the pendency of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, the involved parties entered into a settlement agreement. The Corporate Debtor committed to paying the entire claimed operational debt in three installments. While two installments were paid as per the agreement, the third installment of Rs. 1,16,82,263/- remained unpaid.
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