# In the matter of Utkal Builders Ltd. TP N. 25-CTB-2019, CP (IB) No. 477-KB-2019, IA No. 116-CTB-2019

> NCLT judgment dated 2019-10-04. Citation: TCN-2019-NCLT-01091. The case involves an application (IA No. 116/CTB/2019) filed by the Operational Creditor…

- **Court:** NCLT
- **Order date:** 4 Oct 2019
- **Citation:** TCN-2019-NCLT-01091
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/utkal-builders-ltd-tp-n-25-ctb-2019-cp-ib-no-477-kb-2019-ia-no-116-ctb-2019-33b426fc

## Summary

### Background

The case involves an application (IA No. 116/CTB/2019) filed by the Operational Creditor seeking termination of the Corporate Insolvency Resolution (CIR) process, which was initiated on 27.09.2019. The Operational Creditor and Corporate Debtor are present before the Adjudicating Authority. The Corporate Debtor is represented by its Practicing Cost Accountant, Mr. Shyam Sundar Sonthalia. The Operational Creditor is represented by Ld. Counsel Mr. Saroj Kumar Sahoo. Both parties have settled the claim between themselves, and the Operational Creditor has received the entire amount as per the settlement agreement. The IRP appointed by the Adjudicating Authority is not present before this Adjudicating Authority. A compromise has been effected between the parties.

## Facts

The Operational Creditor initiated a Corporate Insolvency Resolution (CIR) process against the Corporate Debtor on 27.09.2019. Subsequently, the Operational Creditor and the Corporate Debtor reached a settlement agreement, with the Operational Creditor receiving the entire amount as per the agreement. The Corporate Debtor submitted that no Committee of Creditors (COC) had been constituted. The Operational Creditor then filed an application (IA No. 116/CTB/2019) seeking the termination of the CIR process. The Adjudicating Authority considered the settlement and the fact that no COC had been formed. The relevance of the settlement is that it allows for the termination of the CIR process before the COC is formed, saving time and resources. The absence of a COC is also a

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## Issues and analysis

### Issue 1: Whether the CIR process can be terminated prior to the constitution of the COC when a compromise …

**Ratio:** The CIR process can be terminated prior to the constitution of the COC on a compromise

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**Reasoning:** The court reasoned that since a compromise had been reached between the parties and no

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**Interpretation:** This legal issue concerns the interpretation of the Insolvency and Bankruptcy

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**Application:** In this case, the Operational Creditor and the Corporate Debtor reached a

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## Parties

- **Judges:** Sucharitha…; Satya Ranjan…
- **Respondents:** Utkal Builders…

## Timeline

- **2019-09-27 — Initiation of CIR…**: The Corporate Insolvency…
- **2019-10-01 — Settlement Ag…**: A settlement agreement was reached between the Corporate Debtor and the Operational…

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