# In the matter of Omkar Speciality Chemical Limited IA 1521-2022 In C.P. (IB)-1738(MB)2017

> NCLT judgment dated 2022-12-05. Citation: TCN-2022-NCLT-00236. The case involves an application (IA 1521/2022) for the revival of a Company Petition…

- **Court:** NCLT
- **Order date:** 5 Dec 2022
- **Citation:** TCN-2022-NCLT-00236
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/omkar-speciality-chemical-limited-ia-1521-2022-in-cp-ib-1738mb2017-88699a6f

## Summary

### Background

The case involves an application (IA 1521/2022) for the revival of a Company Petition (IB)/1738(MB)2017 filed under Rule 11 of NCLT Rules, 2016. The applicant, M/s. Ela Enterprise, had initially filed a Company Petition for initiating Corporate Insolvency and Bankruptcy Code proceedings for a debt of Rs. 1,61,81,246/- against Omkar Speciality Chemical Limited. Subsequently, the Corporate Debtor and Operational Creditor entered into a settlement agreement, with liberty granted to the Operational Creditor vide order dated 13.03.2020.

## Facts

M/s. Ela Enterprise, the Operational Creditor, filed a Company Petition (IB)/1738(MB)2017 seeking initiation of Corporate Insolvency and Bankruptcy Code (CIRP) against Omkar Speciality Chemical Limited for a debt of Rs. 1,61,81,246/-. A settlement agreement was entered into between the Corporate Debtor and Operational Creditor, with liberty granted to the Operational Creditor via an order dated 13.03.2020. The Corporate Debtor allegedly failed to pay the first installment as per the settlement agreement. The Operational Creditor then filed an application (IA 1521/2022) for the revival of the Company Petition. During the hearing, the Corporate Debtor admitted its inability to pay the outstanding amount. This admission and the alleged breach of the settlement agreement

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## Issues and analysis

### Issue 1: Whether the Company Petition (IB)/1738(MB)2017 should be revived and admitted given the Corporate …

**Ratio:** The legal principle is that if a settlement agreement is breached, the original cause of

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**Reasoning:** The court reasoned that since the Corporate Debtor failed to pay the first installment as

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**Interpretation:** This interprets that a settlement agreement is binding, and its breach allows

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**Application:** The ratio and reasoning were applied to the specific facts where the Corporate

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Respondents:** Omkar Speciality…

## Timeline

- **2020-03-13 — Order granting liberty…**: Order was granted to the Operational…
- **2022-12-05 — Order Shee…**: Date of the order sheet of the hearing of Mumbai Bench of the National Company Law…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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