# In the matter of Life Shine Medical Services Pvt. Ltd. CP (IB) No. 47-9-HDB-2020

> NCLT judgment dated 2020-03-12. Citation: TCN-2020-NCLT-01573. The case involves an application by an Operational Creditor seeking initiation of the Corporate…

- **Court:** NCLT
- **Order date:** 12 Mar 2020
- **Citation:** TCN-2020-NCLT-01573
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/life-shine-medical-services-pvt-ltd-cp-ib-no-47-9-hdb-2020-50c4b5b8

## Summary

### Background

The case involves an application by an Operational Creditor seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the respondent due to an alleged default in payment of an operational debt amounting to Rs. 11,52,665. The respondent appeared after receiving notice, and the parties subsequently settled the matter out of court.

## Facts

AGS Management Services Private Limited, the operational creditor, filed a company petition (CP (IB) No. 47/9/HDB/2020) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Life Shine Medical Services Private Limited, the corporate debtor, due to an alleged default of Rs. 11,52,665. The respondent appeared after notice. The parties then settled the matter out of court. A memo of withdrawal was filed along with a memorandum of understanding dated 2020-03-03, indicating settlement of the debt. The respondent's counsel handed over a demand draft for Rs. 6,50,000 towards full and final settlement of the operational debt to the applicant's counsel. The company petition had not yet been

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## Issues and analysis

### Issue 1: Whether the Operational Creditor can be granted permission to withdraw the petition under Rule 8 of …

**Ratio:** Rule 8 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules,

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**Reasoning:** The court perused the memo of withdrawal and noted that the parties had reached a

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**Interpretation:** Rule 8 provides the Adjudicating Authority with the discretion to allow

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**Application:** In this case, the parties reached a settlement out of court, and the respondent

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## Parties

- **Judges:** Janab Mohammed…; Narender Kumar…
- **Appellants:** A G S Management…
- **Respondents:** Life Shine…; Life Shine…

## Timeline

- **2020-03-03 — Memorandum of…**: Memorandum of understanding dated…
- **2020-03-12 — Hearing…**: Hearing held on 12.03.2020 where the memo of settlement was filed and a demand draft 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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