# In the matter of Datamatics Digital Limited Vs. Sipani Online Pvt. Ltd. CA(AT)(Ins) No. 1211 of 2019

> NCLAT judgment dated 2020-03-16. Citation: TCN-2020-NCLAT-00301. The case involves an appeal against the initiation of a corporate insolvency resolution…

- **Court:** NCLAT
- **Order date:** 16 Mar 2020
- **Citation:** TCN-2020-NCLAT-00301
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/datamatics-digital-limited-vs-sipani-online-pvt-ltd-ca-12cf3200

## Summary

### Background

The case involves an appeal against the initiation of a corporate insolvency resolution process. The parties, Datamatics Digital Limited (Appellant) and Sipani Online Pvt. Ltd. (Respondent), reached an amicable settlement. The settlement was formalized in a 'Memorandum of Settlement' executed on December 30, 2019. The order of admission of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, was passed on July 18, 2019.

## Facts

Datamatics Digital Limited filed an appeal against Sipani Online Pvt. Ltd. regarding a corporate insolvency resolution process. Before the 'Committee of Creditors' was formed, both parties reached a settlement on December 30, 2019. The NCLAT acknowledged this settlement, noting it occurred before the committee's formation. The original application under Section 9 of the I&B Code was withdrawn. The NCLAT invoked its powers under Rule 11 of the NCLAT Rules, 2016, to allow the settlement. The order admitting the insolvency application was passed on July 18, 2019. The Resolution Professional's fees were increased to Rs. 2,00,000, with the appellant responsible for paying the remaining Rs. 1,50,000. The corporate debtor is now free to operate independently.

## Issues and analysis

### Issue 1: Whether the NCLAT was justified in invoking its inherent powers under Rule 11 of the NCLAT Rules, …

**Ratio:** The NCLAT has the inherent power to allow parties to settle disputes, especially when it

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**Reasoning:** The court reasoned that allowing the settlement would bring an end to the dispute and

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**Interpretation:** Rule 11 of the NCLAT Rules, 2016, provides the NCLAT with the power to make

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**Application:** The NCLAT applied this principle to the present case, finding that allowing the

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## Parties

- **Judges:** Bansi Lal…; Anant Bijay…; +1 more
- **Appellants:** Datamatics…
- **Respondents:** Sipani Online…

## Timeline

- **2019-07-18 — Order of Ad…**: Order of admission of application under Section 9 of the Insolvency and Bankruptcy Code,…
- **2019-12-30 — Memorandum of S…**: Parties executed a…

## 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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