NCLAT Cannot Record Settlement After Admission Of CIRP By NCLT: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical), has refused to record the settlement between the parties and remanded the matter back to the adjudicating authority. The appeal was filed challenging the adjudicating authority's order, which was passed without hearing the appellant. By the impugned order, the NCLT admitted the respondent into the CIRP. The appellant submitted that it had informed the NCLT that the issue is likely to be settled and sought time to file the reply. And now the appellant had fully settled with the financial creditor who initiated the CIRP. Relying on the ruling of Abhishek Singh, Suspended Director of Manpasand Beverages Ltd. v. Yoginkumar Ashokbhai Patel & another in [Company Appeal (AT) (Ins) No.1863 of 2024], it submitted that the NCLAT can set aside the order and record the settlement. The NCLAT observed that the appellant was not heard on merit, and it deserves the opportunity to be heard. It also set aside the order of the adjudicating authority. While considering the submission that the NCLAT can itself record the settlement, the tribunal observed that since the order of CIRP has been set aside, the case relegates to the stage before the admission of CIRP. The bench also discussed that since the CIRP has commenced, there is a possibility that the IRP must have received some claims; thus, those claims cannot be ignored. Therefore, the matter should be remanded back to the NCLT to deal with the issue of the settlement. With the above observations, the bench allowed the appeal by setting aside the impugned order and remanded back the matter to the adjudicating authority. Case Name: Mehul Harish Gosar vs. Athena Constructions Ltd. and Anr. Case No.: Company Appeal (AT) (Ins) No. 767 of 2025 For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Mr. Apoorv Shukla, Mr. Prerak Sharma, Ms. Prabhleen A. Shukla and Mr. Ayush Acharjee, Advocates For Respondent: Ms. Aakashi Lodha, Mr. Aditya Sharan and Mr. Rohit Gupta, Advocates for R-1 Coram: Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical) Judgment Date: 15.10.2025 Click Here To Read/Download The Order

NCLAT Cannot Record Settlement After Admission Of CIRP By NCLT: NCLAT New Delhi

Mohd.Rehan Ali

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