# In the matter of Kaarau Collections Pvt. Ltd. (IB)-1414(ND)-2018

> NCLT judgment dated 2019-03-25. Citation: TCN-2019-NCLT-04372. The Operational Creditor and the ex-directors of the Corporate Debtor entered into a…

- **Court:** NCLT
- **Order date:** 25 Mar 2019
- **Citation:** TCN-2019-NCLT-04372
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kaarau-collections-pvt-ltd-ib-1414nd-2018-ae786e40

## Summary

### Background

The Operational Creditor and the ex-directors of the Corporate Debtor entered into a compromise, leading to certain payments. The counsel for the IRP stated that no steps were taken to convene a meeting of the Committee of Creditors (CoC) due to the compromise. The counsel for the Operational Creditor, in view of the settlement, has instructions to withdraw the present petition.

## Facts

The Operational Creditor and the ex-directors of the Corporate Debtor reached a compromise, resulting in payments. A post-dated cheque dated 2019-04-15 was tendered. Due to the compromise, the Operational Creditor sought to withdraw the insolvency petition filed under Section 9 of the IBC, 2016, but requested the liberty to revive the petition if the cheque was dishonored. The IRP's counsel stated that no CoC meeting was convened due to the compromise. The case was before the New Delhi Bench of the National Company Law Tribunal (NCLT).

## Issues and analysis

### Issue 1: Whether the Operational Creditor should be allowed to withdraw the insolvency petition in light of …

**Ratio:** The court has the discretion to allow the withdrawal of a petition if it is satisfied

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**Reasoning:** The court noted the compromise between the parties and the Operational Creditor's request

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**Interpretation:** This reflects the principle that courts generally encourage settlements and

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**Application:** The court applied this principle by allowing the withdrawal of the petition,

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## Parties

- **Judges:** V.K. SUB…; Ina Mal…
- **Appellants:** M/s. Ivory…
- **Respondents:** M/s. Kaarau…

## Timeline

- **2019-03-25 — Hearing…**: Hearing before the New Delhi Bench of…
- **2019-04-15 — Post-dated Che…**: A post-dated cheque of this date was…

## 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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