# In the matter of B. Arun Eashwar & Ors. Vs. OPG Power Generation Pvt. Ltd. & Anr. CA (AT) (Insolvency) No. 352-2019

> NCLAT judgment dated 2019-05-03. Citation: TCN-2019-NCLAT-00591. The Appellants, 'B. Arun Eashwar & Ors.' (shareholders) of 'M/s. Balu Spinning Mills Private…

- **Court:** NCLAT
- **Order date:** 3 May 2019
- **Citation:** TCN-2019-NCLAT-00591
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/b-arun-eashwar-ors-vs-opg-power-generation-pvt-ltd-anr-ca-a0a43fcb

## Summary

### Background

The Appellants, 'B. Arun Eashwar & Ors.' (shareholders) of 'M/s. Balu Spinning Mills Private Limited' (Corporate Debtor), filed an appeal against the order dated 28th March, 2019, passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai, which admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by 'M/s. OPG Power Generation Private Limited' (Operational Creditor).

## Facts

The Appellants, shareholders of 'M/s. Balu Spinning Mills Private Limited' (Corporate Debtor), appealed against the Adjudicating Authority's order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by 'M/s. OPG Power Generation Private Limited' (Operational Creditor). Before the 'Committee of Creditors' was constituted, the parties reached a settlement, which was submitted to the court. The court considered this settlement and the decision of the Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr'. The relevance of the settlement lies in the fact that it occurred before the constitution of the Committee of Creditors, allowing the court to consider it favorably. The court then allowed the withdrawal of the application under

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## Issues and analysis

### Issue 1: Whether the settlement reached between the parties before the constitution of the 'Committee of …

**Ratio:** The legal principle applied is that settlements reached before the constitution of the

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**Reasoning:** The court reasoned that since the parties had settled the matter prior to the

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**Interpretation:** This interprets the legal position that settlements are encouraged in

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**Application:** In this case, the settlement was reached before the Committee of Creditors was

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** B. Arun E…
- **Respondents:** M/s. Balu…; OPG Power…

## Timeline

- **2019-03-28 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai,…
- **2019-04-12 — Matter Ta…**: Learned counsel for the Appellant submitted that the parties have settled the matter and…

## 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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