# In the matter of Sunil Ghorawat Vs. Arvind Envisol Ltd. & Anr. CA (AT) (insolvency) No. 100-2019

> NCLAT judgment dated 2019-03-01. Citation: TCN-2019-NCLAT-00749. Mr. Sunil Ghorawat, Director of M/s. Earth Water Limited (Corporate Debtor), filed an appeal…

- **Court:** NCLAT
- **Order date:** 1 Mar 2019
- **Citation:** TCN-2019-NCLAT-00749
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sunil-ghorawat-vs-arvind-envisol-ltd-anr-ca-6a5626f1

## Summary

### Background

Mr. Sunil Ghorawat, Director of M/s. Earth Water Limited (Corporate Debtor), filed an appeal against the order dated January 15, 2019, passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi. The Adjudicating Authority had admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, preferred by the Respondent, M/s. Arvind Envisol Limited, and had passed an order of moratorium and appointed an Interim Resolution Professional. The Appellant contended that the order was passed ex parte without notice. The parties informed the court that they had reached a settlement.

## Facts

Mr. Sunil Ghorawat, the Director of M/s. Earth Water Limited (the 'Corporate Debtor'), appealed against an order passed by the Adjudicating Authority (National Company Law Tribunal) on January 15, 2019. This order admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by M/s. Arvind Envisol Limited (the 'Respondent'). The Adjudicating Authority also imposed a moratorium and appointed an Interim Resolution Professional. The appellant argued that the order was passed ex parte without notice. During the appeal proceedings, both parties informed the court that they had reached a settlement. The Committee of Creditors had not yet been formed. The Resolution Professional had incurred costs of Rs. 35,000/- and was entitled to a fee of Rs.

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## Issues and analysis

### Issue 1: Whether the order passed by the Adjudicating Authority admitting the application under Section 9 of …

**Ratio:** The legal principle applied is that if parties reach a settlement before the constitution

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**Reasoning:** The court reasoned that since the parties had reached a settlement before the Committee

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**Interpretation:** The interpretation is that the insolvency process is intended to facilitate

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**Application:** In this specific case, the court applied the ratio by acknowledging the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Sunil Gho…
- **Respondents:** M/s. Earth Water…; M/s. Arvind…

## Timeline

- **2019-01-15 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal) passed an order admitting the…
- **2019-02-08 — Settlement Draf…**: Two drafts for Rs. 52,23,500/- and Rs. 10,18,583/- were issued by the Union Bank 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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