# In the matter of Hansraj Agrofresh Private Limited RST. A No. 1-2021 in C.P. (IB) No. 40-ALD-2019

> NCLT judgment dated 2021-11-29. Citation: TCN-2021-NCLT-00377. The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 29 Nov 2021
- **Citation:** TCN-2021-NCLT-00377
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hansraj-agrofresh-private-limited-rst-a-no-1-2021-in-cp-ib-no-40-ald-2019-10a88f81

## Summary

### Background

The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, filed by Magpet Polymer Private Limited, the Operational Creditor, against Hansraj Agrofresh Private Limited, the Corporate Debtor. The Operational Creditor sought initiation of Insolvency Proceedings against the Corporate Debtor. A settlement agreement was entered into on February 8, 2020, after the admission of the Corporate Debtor into CIRP on February 6, 2020. This settlement agreement was later breached, but it contained a clause for the revival of the main CP. An application under Section 12A was filed based on the settlement agreement, and the Authority set aside the admission order of the Corporate Debtor into CIRP on February 27, 2020.

## Facts

Magpet Polymer Private Limited (Operational Creditor) filed an application against Hansraj Agrofresh Private Limited (Corporate Debtor) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Insolvency Proceedings. After the Corporate Debtor's admission into CIRP, a settlement agreement was entered on February 8, 2020, where the promoter of the Corporate Debtor agreed to pay ₹54,74,000/- to the Operational Creditor. Based on this agreement, an application under Section 12A was filed, and the admission order of the Corporate Debtor into CIRP was set aside on February 27, 2020. Subsequently, the cheques issued by the Corporate Debtor were dishonored, leaving ₹44,74,000/- outstanding. Clause 6 of the settlement agreement provided for the

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## Issues and analysis

### Issue 1: Whether the original application CP NO. (IB) 40/ALD/2019 should be restored to its original stage …

**Ratio:** The legal principle applied is that if a settlement agreement, entered into after the

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**Reasoning:** The court reasoned that the settlement agreement dated February 8, 2020, was not fully

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**Interpretation:** The interpretation is that a settlement agreement, while providing a temporary

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**Application:** The court applied the ratio to the facts by noting that the settlement

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## Parties

- **Judges:** Rajasekha…; Virendra Kumar…
- **Appellants:** Magpet Polymers…
- **Respondents:** Hansraj Agrofresh…

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and Bankruptcy…
- **2019-01-01 — Original Appl…**: CP (IB) No. 40/ALD/2019…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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