# In the matter of T. Dhanasekar Vs. Vinayak Cotton Agencies & Anr. CA (AT) (Insolvency) No. 582 of 2019

> NCLAT judgment dated 2019-07-03. Citation: TCN-2019-NCLAT-00487. M/s. Vinayak Cotton Agencies (Operational Creditor) filed an application under Section 9 of…

- **Court:** NCLAT
- **Order date:** 3 Jul 2019
- **Citation:** TCN-2019-NCLAT-00487
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/t-dhanasekar-vs-vinayak-cotton-agencies-anr-ca-61be08bf

## Summary

### Background

M/s. Vinayak Cotton Agencies (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s. Mariyammal Spinners Pvt. Limited (Corporate Debtor). The application was admitted on May 20, 2019, by the Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai. The present appeal was preferred by Mr. T. Dhanasekar, Managing Director of the Corporate Debtor.

## Facts

M/s. Vinayak Cotton Agencies, the Operational Creditor, initiated insolvency proceedings against M/s. Mariyammal Spinners Pvt. Ltd., the Corporate Debtor, by filing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the application on May 20, 2019. Mr. T. Dhanasekar, the Managing Director of the Corporate Debtor, filed an appeal against this order. During the appeal proceedings, the Appellant and the Operational Creditor reached a settlement. The Interim Resolution Professional (IRP) confirmed that the Committee of Creditors had not yet been constituted. The Appellant agreed to pay the IRP's fees and resolution costs. The court, exercising its inherent powers, allowed the settlement, set aside the

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## Issues and analysis

### Issue 1: Whether the settlement between the Appellant and the Operational Creditor warrants setting aside …

**Ratio:** The National Company Law Appellate Tribunal (NCLAT) has the inherent power under Rule 11

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**Reasoning:** The court considered the fact that the parties had reached a settlement and that the

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**Interpretation:** Rule 11 of the NCLAT Rules, 2016 provides the NCLAT with the power to make such

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**Application:** In this case, the court applied the ratio by exercising its inherent powers

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +2 more
- **Appellants:** T. Dhana…
- **Respondents:** M/s. Mariyammal…; M/s. Vinayak…

## Timeline

- **2019-05-20 — Admission of Ap…**: The Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai,…
- **2019-06-03 — Settlement In…**: The learned counsel for the Appellant and the 1st Respondent (Operational Creditor)…

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