# In the matter of Desh Bhushan Jain, Erstwhile Director of Angel Promoters Pvt. Ltd. vs. Abhay Kumar, IRP of Angel Promoters Pvt. Ltd. & Ors.

> NCLAT judgment dated 2024-05-20. Citation: TCN-2024-NCLAT-00421. This case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 20 May 2024
- **Citation:** TCN-2024-NCLAT-00421
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/desh-bhushan-jain-erstwhile-director-of-angel-promoters-pvt-ltd-vs-abhay-kumar-i-41efe0b5

## Summary

### Background

This case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal) admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by financial creditors against Angel Promoters Pvt. Ltd. (Corporate Debtor). The Corporate Debtor had availed a loan from the financial creditors and defaulted in repayment. A prior settlement agreement was reached, and the initial petition was withdrawn. However, due to further defaults by the Corporate Debtor, the financial creditors filed a second petition, which was admitted, leading to the present appeal by the erstwhile director of the Corporate Debtor.

## Facts

Angel Promoters Pvt. Ltd. (Corporate Debtor) availed a loan from financial creditors. The Corporate Debtor defaulted on the loan repayment, leading the financial creditors to file a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. During the pendency of the first petition, a settlement agreement was reached between the parties on 26.07.2018, where the Corporate Debtor agreed to pay Rs. 4,34,00,000/- plus interest. The first petition was withdrawn on 27.07.2018 based on this settlement. The Corporate Debtor failed to make timely payments as per the settlement agreement, with post-dated cheques being dishonored or requests for extensions. The Corporate Debtor paid Rs. 1,10,00,000/- but continued to default. The financial creditors filed a second

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## Issues and analysis

### Issue 1: Whether the second petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, was …

**Ratio:** A settlement agreement does not bar the Financial Creditor from filing a Section 7

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**Reasoning:** The court reasoned that the first petition was not filed on the basis of the settlement

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**Interpretation:** The interpretation is that a settlement agreement is not a complete bar to

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**Application:** In this case, the Corporate Debtor defaulted on the settlement agreement,

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Desh Bhusha…
- **Respondents:** angel promoters…; Abhay K…

## Timeline

- **2018-07-26 — Settlement Ag…**: A settlement agreement was arrived at between the parties, where the Corporate Debtor…
- **2018-07-27 — Withdrawal of First…**: The first petition under Section 7 of the IBC was withdrawn based on the settlement…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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