# In the matter of G S Promoters Private Limited (IB) 1548 (ND)-2019

> NCLT judgment dated 2020-05-27. Citation: TCN-2020-NCLT-01310. The case involves a contempt of court application filed by financial creditors against the…

- **Court:** NCLT
- **Order date:** 27 May 2020
- **Citation:** TCN-2020-NCLT-01310
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/g-s-promoters-private-limited-ib-1548-nd-2019-8b6ffe7a

## Summary

### Background

The case involves a contempt of court application filed by financial creditors against the directors of the corporate debtor, G S Promoters Private Limited, for allegedly violating the terms of a settlement agreement. The financial creditors claimed that the corporate debtor failed to pay a settled amount of Rs. 84,35,820, and cheques issued for Rs. 14,05,970 each were dishonored. The financial creditors sought punishment for the directors under Section 73(b) of the IBC, 2016, read with Rule 11 of the NCLT Rules, 2016. The main application was previously disposed of with liberty granted to the applicant to restore it in case of default of cheque getting dishonoured.

## Facts

Anuradha Bhardwaj and Atul Bhardwaj, financial creditors, filed an application against G S Promoters Private Limited, the corporate debtor, alleging violation of a settlement agreement. The corporate debtor was obligated to pay Rs. 84,35,820. Cheques issued by the corporate debtor, bearing numbers 002222 dated 2019-11-25 and 002223 dated 2019-12-11, each for Rs. 14,05,970, were dishonored. The financial creditors sought to initiate contempt proceedings against the directors of the corporate debtor under Section 73(b) of the IBC, 2016, read with Rule 11 of the NCLT Rules, 2016. The main application had been previously disposed of with liberty to restore it in case of default. Instead of restoring the main application, the financial creditors filed the contempt

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## Issues and analysis

### Issue 1: Whether the directors of the respondent should be punished for violating the terms of settlement …

**Ratio:** The violation of terms of settlement does not automatically constitute disobedience of an

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**Reasoning:** The court reasoned that the settlement was an agreement between the parties, and the

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**Interpretation:** Section 73(b) of the IBC, 2016, read with Rule 11 of the NCLT Rules, 2016,

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**Application:** In this case, the court found that the settlement was an agreement between the

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Anuradha Bh…
- **Respondents:** G S Promoters…

## Timeline

- **2019-09-16 — Disposal of Main…**: The main application was disposed of with liberty granted to the applicant to restore it…
- **2019-11-25 — Cheque Dish…**: Third cheque bearing no. 002222 dated 25.11.2019 for an amount of Rs. 14,05,970/- was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 73(b) — Punishment for false representations to…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-73)

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