# In the matter of Avishek Roy, Shareholder of Reacon Engineers (India) Pvt. Ltd. Vs Diamond Steel Enterprise & Ors. CA(AT)(Insolvency) 794-2018

> NCLAT judgment dated 2019-03-12. Citation: TCN-2019-NCLAT-00728. The appeal was filed by the shareholder of M/s Reacon Engineers (India) Pvt. Ltd. against the…

- **Court:** NCLAT
- **Order date:** 12 Mar 2019
- **Citation:** TCN-2019-NCLAT-00728
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/avishek-roy-shareholder-of-reacon-engineers-india-pvt-ltd-vs-diamond-steel-enter-5dddbf0a

## Summary

### Background

The appeal was filed by the shareholder of M/s Reacon Engineers (India) Pvt. Ltd. against the order dated December 5, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata, which admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) filed by Diamond Steel Enterprise (Operational Creditor) against M/s Reacon Engineers (India) Pvt. Ltd. (Corporate Debtor). The appellant argued that a settlement had been reached prior to the constitution of the Committee of Creditors.

## Facts

Diamond Steel Enterprise filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s Reacon Engineers (India) Pvt. Ltd. The Adjudicating Authority admitted the application on December 5, 2018. Avishek Roy, a shareholder of M/s Reacon Engineers (India) Pvt. Ltd., filed an appeal against this order. The appellant claimed that a settlement had been reached with Diamond Steel Enterprise prior to the constitution of the Committee of Creditors. The appellant had prepared a draft for Rs.15,78,762 on December 18, 2018, and another draft for Rs.6,21,238 on December 27, 2018. A 'Deed of Settlement' was reached on December 26, 2018. The Committee of Creditors was constituted on December 28, 2018. The appellant argued that the settlement should be

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## Issues and analysis

### Issue 1: Whether the settlement reached between the parties prior to the constitution of the Committee of …

**Ratio:** The Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors.'

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**Reasoning:** The court reasoned that since the settlement was reached prior to the constitution of the

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**Interpretation:** The interpretation is that a settlement reached before the constitution of the

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**Application:** In this case, the settlement was reached on December 26, 2018, while the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Avishek…
- **Respondents:** M/s Reacon…; Diamond Steel…

## Timeline

- **2018-12-05 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata…
- **2018-12-18 — Draft Prepared by…**: The Appellant prepared a draft dated…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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