# In the matter of Murtaza Hamza Kothawala Vs Megamet Steels Private Limited & Ors

> NCLAT judgment dated 2024-04-10. Citation: TCN-2024-NCLAT-00513. The case involves an appeal against an order dated 2024-01-24, which admitted a Section 9…

- **Court:** NCLAT
- **Order date:** 10 Apr 2024
- **Citation:** TCN-2024-NCLAT-00513
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/murtaza-hamza-kothawala-vs-megamet-steels-private-limited-ors-74051a48

## Summary

### Background

The case involves an appeal against an order dated 2024-01-24, which admitted a Section 9 application under the Insolvency and Bankruptcy Code, 2016. The appellant disputed the invoices on which the Section 9 application was filed but expressed readiness to deposit the claimed amount without prejudice to their rights. An interim order was passed on 2024-02-01.

## Facts

Murtaza Hamza Kothawala filed an appeal against an order dated 2024-01-24, which admitted a Section 9 application under the Insolvency and Bankruptcy Code, 2016. Kothawala disputed the invoices but offered to deposit Rs. 35,26,597/-. An interim order was passed on 2024-02-01. Later, both parties settled the dispute outside the court, leading to Respondent No. 1 agreeing to withdraw the claim. An I.A. No. 2530 of 2024 was filed to record the settlement. The key fact is the out-of-court settlement, which influenced the court's decision to set aside the impugned order and terminate the CIRP.

## Issues and analysis

### Issue 1: Whether the impugned order dated 2024-01-24, admitting the Section 9 application, should be set …

**Ratio:** When parties to a dispute reach a settlement outside of court and jointly apply for the

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**Reasoning:** The court reasoned that since both parties had settled their dispute outside the court

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**Interpretation:** This reflects the principle that courts encourage settlements to reduce

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**Application:** The court applied this principle by setting aside the impugned order, as the

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## Parties

- **Judges:** Ashok Bh…; Arun Ba…
- **Appellants:** Murtaza Hamza…
- **Respondents:** Megamet Steels…

## Timeline

- **2024-01-24 — Impugned…**: Order passed admitting…
- **2024-02-01 — Interim…**: Interim order passed directing the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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