# In the matter of Morpheus Developers Pvt. Ltd. vs. Gagan Ferrotech Ltd.

> SC judgment dated 2018-07-20. Citation: TCN-2018-SC-00040. The case involves a dispute between M/S. Morpheus Developers Pvt. Ltd. and M/S. Gagan Ferrotech…

- **Court:** SC
- **Order date:** 20 Jul 2018
- **Citation:** TCN-2018-SC-00040
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/morpheus-developers-pvt-ltd-vs-gagan-ferrotech-ltd-c60c8015

## Summary

### Background

The case involves a dispute between M/S. Morpheus Developers Pvt. Ltd. and M/S. Gagan Ferrotech Ltd. A Memorandum of Understanding (MOU)/Deed of Settlement was executed between the parties on 07.06.2018 to settle their disputes. The National Company Law Tribunal (NCLT), New Delhi, passed an order on 11.06.2018, which was subsequently followed by another order dated 09.07.2018.

## Facts

M/S. Morpheus Developers Pvt. Ltd. and M/S. Gagan Ferrotech Ltd. were involved in a dispute. On 07.06.2018, they entered into a MOU/Deed of Settlement to resolve their issues. The NCLT, New Delhi, issued an order on 11.06.2018, followed by another order on 09.07.2018. The Supreme Court, in its judgment, noted that the order dated 09.07.2018 was incorrect because Section 12A of the Amendment Act to the Insolvency Code, effective from 06.06.2018, allows the withdrawal of an application only with the approval of 90% of the voting share of the Committee of Creditors, but the settlement was reached before the admission order. The Supreme Court set aside both the NCLT orders, emphasizing that Section 12A does not apply when a settlement is reached before the admission order.

## Issues and analysis

### Issue 1: Whether the order dated 09.07.2018 passed by the National Company Law Tribunal is incorrect in …

**Ratio:** Section 12A of the Amendment Act to the Insolvency Code, which came into force on

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**Reasoning:** The Supreme Court reasoned that the order dated 09.07.2018 was incorrect because it did

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**Interpretation:** Section 12A is interpreted to mean that once an application under the

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**Application:** In this case, the Supreme Court applied the ratio by stating that the NCLT's

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## Parties

- **Judges:** ROHINTON FALI…; Indu Mal…
- **Appellants:** M/s. Morpheus…
- **Respondents:** M/S. GAGAN…
- **Other parties:** Over Tu…

## Timeline

- **2018-06-06 — Section 12A Effective…**: Section 12A of the Amendment Act to the…
- **2018-06-07 — MOU/Deed of Se…**: MOU/Deed of Settlement dated…

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