# In the matter of Rajesh Nagpal Vs. Gupta Ji Electric Company and Anr. CA(AT)(Ins) No. 388 of 2020

> NCLAT judgment dated 2020-03-13. Citation: TCN-2020-NCLAT-00305. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 13 Mar 2020
- **Citation:** TCN-2020-NCLAT-00305
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajesh-nagpal-vs-gupta-ji-electric-company-and-anr-ca-6a7c4a3e

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), New Delhi. The appellant, Rajesh Nagpal, an erstwhile director of M/s Straight Edge Contracts Pvt. Ltd., filed the appeal before the National Company Law Appellate Tribunal (NCLAT), New Delhi. The dispute arose from unpaid dues for the supply of electrical fittings and components by the respondent, Gupta Ji Electric Company, to the appellant's company. The respondent had initiated Corporate Insolvency Resolution Process (CIRP) against the appellant's company due to the default in payment. The parties subsequently entered into a Memorandum of Understanding (MoU) to settle the dispute.

## Facts

M/s Straight Edge Contracts Pvt. Ltd., through its director Rajesh Nagpal (Appellant), procured electrical fittings and components from Gupta Ji Electric Company (Respondent No. 1). An amount of Rs. 1,46,49,934/- became due from M/s Straight Edge Contracts Pvt. Ltd. to Gupta Ji Electric Company. Due to the default in payment, Gupta Ji Electric Company filed CP (IB) No. 1071 (ND) OF 2019 before the National Company Law Tribunal (NCLT), New Delhi, which was admitted on 26.02.2020. Aggrieved by the NCLT order, Rajesh Nagpal filed an appeal before the National Company Law Appellate Tribunal (NCLAT). During the pendency of the appeal, both parties entered into a Memorandum of Understanding (MoU) on 12th March 2020, wherein M/s Straight Edge Contracts Pvt. Ltd. agreed to pay

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## Issues and analysis

### Issue 1: Whether the NCLAT was justified in accepting the Memorandum of Understanding (MoU) between the …

**Ratio:** The legal principle applied is that parties are free to settle their disputes amicably,

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**Reasoning:** The court reasoned that the parties had entered into a settlement agreement (MoU) to

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**Interpretation:** This involves interpreting the scope of the NCLAT's powers to facilitate

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**Application:** The ratio and reasoning were applied to the specific facts of the case by

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## Parties

- **Judges:** A.I.S. C…; Anant Bijay…; +1 more
- **Appellants:** Rajesh N…
- **Respondents:** Straight Edge…; Gupta Ji Electric…

## Timeline

- **2019-01-01 — CP (IB) No. 1071 (ND)…**: Gupta Ji Electric Company filed CP (IB) No. 1071 (ND) OF 2019 before the National Company…
- **2020-02-26 — NCLT admits CP (IB) No.…**: The National Company Law Tribunal (NCLT), New Delhi admitted CP (IB) No. 1071 (ND) OF…

## 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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