When settlement consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, the CIRP can be restored – IDBI Trausteeship Services Ltd. Vs. Nirmal Lifestyle Ltd. – NCLAT New Delhi

On Corporate Debtor subsequent to the withdrawal of the Company Petition defaulted in making payment towards the second tranche as per consent term, the Appellant filed an I.A. seeking revival of the Company Petition which has been rejected by Adjudicating Authority observing that when the Company Petition was withdrawn after settlement there is no specific provision anywhere in the Code for reopening of the Company Petition.
NCLAT held that Adjudicating Authority committed error in rejecting the revival application 3196 of 2022 when the consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, rejection of revival is to deny the Financial Creditor rightful remedy. Non-mention of specific liberty in the Order is inconsequential in view of the clear terms in the settlement which was the basis of withdrawal of Company Petition.

When settlement consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, the CIRP can be restored – IDBI Trausteeship Services Ltd. Vs. Nirmal Lifestyle Ltd. – NCLAT New Delhi Read Post »