# In the matter of Shree Manickam Infrastructure Pvt. Ltd. & 1 Ors. MA-30-IB-2018 IN CP-261-IB-2018

> NCLT judgment dated 2018-05-31. Citation: TCN-2018-NCLT-01348. The Operational Creditor filed an application in CP/261/IB/2018 stating that a settlement had…

- **Court:** NCLT
- **Order date:** 31 May 2018
- **Citation:** TCN-2018-NCLT-01348
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-manickam-infrastructure-pvt-ltd-1-ors-ma-30-ib-2018-in-cp-261-ib-2018-6859ee7a

## Summary

### Background

The Operational Creditor filed an application in CP/261/IB/2018 stating that a settlement had been reached with the Corporate Debtor. The IRP submitted a status report indicating that no claims were received from any creditor after the public announcement, which closed on 2018-05-01. The Corporate Debtor's representative stated that a settlement process with Axis Bank, a Financial Creditor, was in progress, and a sum of Rs. 1.85 crores had been paid to the bank. A Joint Memo of Compromise was filed by the Operational Creditor and the Corporate Debtor.

## Facts

The Operational Creditor, Kamachi Industries Ltd, initiated CIRP against the Corporate Debtor, Shree Manickam Infrastructure Pvt Ltd. The Operational Creditor filed an application stating a settlement had been reached. The IRP, Mr. Sundaresan Nagarajan, submitted a status report indicating no claims were received after the public announcement closed on 2018-05-01. Axis Bank, a Financial Creditor, was in the process of settlement with the Corporate Debtor, having received Rs. 1.85 crores. A Joint Memo of Compromise was filed. The Operational Creditor's counsel undertook to pay the IRP's expenses. The key fact is the settlement between the Operational Creditor and Corporate Debtor, leading to the withdrawal of the CIRP application.

## Issues and analysis

### Issue 1: Whether the CIRP against the Corporate Debtor should be continued given the settlement between the …

**Ratio:** When a settlement is reached between the Operational Creditor and the Corporate Debtor,

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**Reasoning:** The court reasoned that the purpose of the CIRP is to resolve insolvency and maximize the

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**Interpretation:** This interprets the Insolvency and Bankruptcy Code (IBC) to allow for the

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**Application:** In this case, the settlement between Kamachi Industries Ltd (Operational

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Kamachi Industries…
- **Respondents:** SHREE MANICKAM…

## Timeline

- **2018-04-17 — Order Da…**: Original order initiating CIRP…
- **2018-05-01 — Public Announcement…**: Date on which the public announcement period closed, with no claims received from…

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