# In the matter of Kamal Mani Gulati vs. Malhar Mehta & Anr.

> NCLAT judgment dated 2023-07-27. Citation: TCN-2023-NCLAT-00341. The appeal was filed against the order dated March 21, 2023, which admitted a Section 7…

- **Court:** NCLAT
- **Order date:** 27 Jul 2023
- **Citation:** TCN-2023-NCLAT-00341
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kamal-mani-gulati-vs-malhar-mehta-anr-615fccb7

## Summary

### Background

The appeal was filed against the order dated March 21, 2023, which admitted a Section 7 application filed by the Financial Creditor-Respondent No. 2. The Committee of Creditors (CoC) had already been constituted, with Respondent No. 2 being the sole member representing 100% of the CoC. An I.A. No. 3357 of 2023 was filed to bring on record a settlement between the Financial Creditor and the Suspended Director. The Financial Creditor agreed to accept the settlement amount, including expenses and CIRP costs.

## Facts

Kamal Mani Gulati filed an appeal against an order dated March 21, 2023, which admitted a Section 7 application by Financial Creditor-Respondent No. 2. The Committee of Creditors (CoC) was already formed, with Respondent No. 2 as the sole member representing 100% of the CoC. An I.A. No. 3357 of 2023 was filed to record a settlement between the Financial Creditor and the Suspended Director. The Financial Creditor agreed to accept the settlement amount, including expenses and CIRP costs. The CoC approved the settlement on July 18, 2023. The appellant had deposited an amount under the order of this Tribunal dated 20th April, 2023.

## Issues and analysis

### Issue 1: Whether the settlement agreement between the Financial Creditor and the Suspended Director warrants …

**Ratio:** When parties reach a settlement and the Committee of Creditors (CoC) approves it, the

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**Reasoning:** The court reasoned that since the CoC had approved the settlement and the parties had

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**Interpretation:** The legal issue revolves around the principle that settlements are favored in

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**Application:** In this case, the court applied the ratio by taking the settlement agreement on

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Kamal Mani…
- **Respondents:** Malhar Mehta &…

## Timeline

- **2023-03-21 — Order Da…**: Order admitting Section 7 Application filed by…
- **2023-04-20 — Order Da…**: Tribunal issued order…

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