# In the matter of Prayag Polytech Pvt. Ltd. CP No. (IB) 287-7-JPR-2019

> NCLT judgment dated 2022-03-30. Citation: TCN-2022-NCLT-03475. The case involves Saptgiri Commodity Pvt. Ltd. as the Financial Creditor and Prayag Polytech…

- **Court:** NCLT
- **Order date:** 30 Mar 2022
- **Citation:** TCN-2022-NCLT-03475
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/prayag-polytech-pvt-ltd-cp-no-ib-287-7-jpr-2019-14980bfe

## Summary

### Background

The case involves Saptgiri Commodity Pvt. Ltd. as the Financial Creditor and Prayag Polytech Pvt. Ltd. as the Corporate Debtor. An insolvency petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016. The matter was being heard by the National Company Law Tribunal, Jaipur Bench.

## Facts

Saptgiri Commodity Pvt. Ltd. (Financial Creditor) initiated insolvency proceedings against Prayag Polytech Pvt. Ltd. (Corporate Debtor) under Section 7 of the IBC, 2016. During the proceedings, a settlement agreement was reached between the parties. Prayag Polytech Pvt. Ltd. agreed to pay Rs. 25,00,000/- to Saptgiri Commodity Pvt. Ltd. The Corporate Debtor fulfilled its obligation by paying the entire amount. Consequently, Saptgiri Commodity Pvt. Ltd. acknowledged the receipt of the payment and requested the NCLT to withdraw the insolvency application. The NCLT considered the settlement and the payment made, and granted permission for the withdrawal of the application.

## Issues and analysis

### Issue 1: Whether the settlement agreement between the Financial Creditor and the Corporate Debtor warrants …

**Ratio:** A settlement agreement reached between the parties in an insolvency proceeding can form

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**Reasoning:** The court reasoned that since the parties had reached a settlement and the Corporate

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**Interpretation:** This interpretation aligns with the spirit of the IBC, which encourages

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**Application:** In this case, the existence of a settlement agreement, coupled with the payment

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## Parties

- **Judges:** Deep Chandr…; RAGHU N…; +1 more
- **Respondents:** Prayag Polytech…

## Timeline

- **2019-01-01 — CP Filed…**: CP No. (IB)- 287/7/JPR/2019 filed…
- **2022-03-29 — Settlement Agreement…**: Settlement agreement filed via…

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