# In the matter of East Coast Construction and Industries Ltd. IBA 487-2020

> NCLT judgment dated 2021-03-10. Citation: TCN-2021-NCLT-02744. The case involves an application under the Insolvency and Bankruptcy Code (IBC). Kotak Mahindra…

- **Court:** NCLT
- **Order date:** 10 Mar 2021
- **Citation:** TCN-2021-NCLT-02744
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/east-coast-construction-and-industries-ltd-iba-487-2020-d1831f44

## Summary

### Background

The case involves an application under the Insolvency and Bankruptcy Code (IBC). Kotak Mahindra Bank Ltd initiated proceedings against M/s. East Coast Construction & Industries Ltd. The applicant's counsel stated that a memo dated 17.02.2021 was filed. The respondent proposed a One Time Settlement to the applicant, which was accepted via letter dated 11.01.2021.

## Facts

Kotak Mahindra Bank Ltd initiated insolvency proceedings against M/s. East Coast Construction & Industries Ltd under Section 7 Rule 4 of IBC, 2016. During the proceedings, M/s. East Coast Construction & Industries Ltd proposed a One Time Settlement to Kotak Mahindra Bank Ltd. Kotak Mahindra Bank Ltd accepted the settlement proposal via letter dated 11.01.2021. The applicant's counsel filed a memo dated 17.02.2021. Consequently, the NCLT dismissed the insolvency application with liberty, as the matter was settled out of court. The key fact is the out-of-court settlement, which led to the dismissal of the case.

## Issues and analysis

### Issue 1: Whether the application under IBA/487/2020 should be dismissed given the settlement between the …

**Ratio:** When parties to an insolvency proceeding reach a settlement out of court, the court may

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**Reasoning:** The court reasoned that since the applicant and respondent had settled the matter out of

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**Interpretation:** This interpretation acknowledges the importance of encouraging out-of-court

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**Application:** In this case, the court applied the ratio by dismissing the IBA/487/2020

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** Kotak Mahindra…
- **Respondents:** M/s. East Coast…

## Timeline

- **2021-01-11 — Acceptance…**: Kotak Mahindra Bank Ltd accepted the One Time Settlement proposal from M/s. East Coast…
- **2021-02-17 — Memo Fil…**: Counsel for the applicant, Kotak Mahindra…

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