# In the matter of Insolvency & Bankruptcy Board of India Vs Wig Associates Pvt Ltd & Ors CA (AT) No. 415 -2018 IA No.1950-2018

> NCLAT judgment dated 2018-12-03. Citation: TCN-2018-NCLAT-00026. The Insolvency and Bankruptcy Board of India (IBBI) raised a legal question in the present…

- **Court:** NCLAT
- **Order date:** 3 Dec 2018
- **Citation:** TCN-2018-NCLAT-00026
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/insolvency-bankruptcy-board-of-india-vs-wig-associates-pvt-ltd-ors-ca-5c61a002

## Summary

### Background

The Insolvency and Bankruptcy Board of India (IBBI) raised a legal question in the present application, bringing to the court's notice that the Resolution Professional allowed the 2nd Respondent, Mahendra Wig's, resolution plan for 'one time settlement', which is allegedly not permissible under the provisions of the Code. It is also alleged that Mahendra Wig is a related party to the Corporate Debtor.

## Facts

The Insolvency and Bankruptcy Board of India (IBBI) has raised concerns regarding a resolution plan approved by the Resolution Professional. The plan, proposed by the 2nd Respondent, Mahendra Wig, involves a 'one time settlement'. IBBI argues that this type of settlement is not permissible under the Insolvency and Bankruptcy Code. Furthermore, it is alleged that Mahendra Wig is a related party to the Corporate Debtor. The relevance of these facts lies in determining the legality and validity of the resolution plan under the existing insolvency laws.

## Issues and analysis

### Issue 1: Whether the 'one time settlement' resolution plan approved by the Resolution Professional is …

**Ratio:** The ratio is based on the interpretation of the Insolvency and Bankruptcy Code (IBC) and

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**Reasoning:** The court's reasoning will depend on its interpretation of the IBC and whether the

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**Interpretation:** The interpretation involves understanding the scope and limitations of the IBC

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**Application:** The application involves analyzing the specific terms of the 'one time

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Insolvency and…
- **Respondents:** Wig Associates…

## Timeline

- **2018-12-03 — Order Da…**: Court order issued regarding the permissibility of a 'one time settlement' resolution…
- **2018-12-05 — Deadline for Filing…**: Deadline for filing the requisite…

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