# In the matter of Permali Wallace Pvt. Ltd. vs. Narbada Forest Industries Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 36 of 2023

> NCLAT judgment dated 2023-01-17. Citation: TCN-2023-NCLAT-00769. The case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 17 Jan 2023
- **Citation:** TCN-2023-NCLAT-00769
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/permali-wallace-pvt-ltd-vs-narbada-forest-industries-pvt-ltd-company-appeal-17d195c8

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal, Indore Bench) rejecting an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The appellant had previously filed a Section 9 application in 2017, which was withdrawn following a settlement agreement between the parties for the payment of a principal amount and interest. The corporate debtor made a payment of Rs. 1,74,16,527/- towards the principal amount and Rs. 16 Lacs towards interest. The current application was filed due to a default in the payment of the remaining interest amount.

## Facts

Permali Wallace Pvt. Ltd. filed an application under Section 9 of the IBC, which was rejected by the Adjudicating Authority (NCLT, Indore Bench). An earlier Section 9 application had been withdrawn due to a settlement agreement between Permali Wallace Pvt. Ltd. and Narbada Forest Industries Pvt. Ltd. Narbada Forest Industries Pvt. Ltd. paid Rs. 1,74,16,527/- towards the principal operational debt and Rs. 16 Lacs towards interest. A dispute arose regarding the remaining interest amount of Rs. 32,00,000/- out of Rs. 48,00,000/- as per the settlement agreement. Permali Wallace Pvt. Ltd. then filed another Section 9 application to recover Rs. 1,28,00,000/- towards the interest. The Adjudicating Authority rejected this application, stating that the IBC proceeding was being

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in rejecting the Section 9 application filed by the …

**Ratio:** The IBC is not a recovery proceeding, as established in "Swiss Ribbon Pvt. Ltd. Vs.

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**Reasoning:** The Adjudicating Authority did not commit any error in rejecting the Section 9

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**Interpretation:** The Supreme Court has clarified that the IBC's primary objective is to resolve

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**Application:** In this case, the application was filed to recover the balance interest amount,

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Permali Wallace…
- **Respondents:** Narbada Forest…

## Timeline

- **2017-01-01 — Previous Application…**: The Appellant had filed an earlier Application under Section 9 in the year 2017 which was…
- **2017-11-07 — Settlement Agreement…**: Settlement agreement entered into between the parties for payment of certain principal…

## 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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