{"id":360553,"date":"2025-09-18T09:30:04","date_gmt":"2025-09-18T04:00:04","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=360553"},"modified":"2025-10-04T14:40:50","modified_gmt":"2025-10-04T09:10:50","slug":"nclat-section-9-ibc-proceedings-closed-based-on-affidavit","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/18\/nclat-section-9-ibc-proceedings-closed-based-on-affidavit\/","title":{"rendered":"Affidavit confirms settlement between Corporate Debtor and Operational Creditor; NCLAT closes Section 9 IBC proceedings"},"content":{"rendered":"
\n

National Company Law Appellate Tribunal, New Delhi:<\/span> In the present case, a company appeal was filed challenging the order dated 3-4-2024 (‘Impugned order’) passed by the Adjudicating Authority, which had admitted the application under Section 9<\/a> of the Insolvency and Bankruptcy Code, 2016<\/a> (‘IBC’) filed by the Operational Creditor (Respondent 1). The Bench of Ashok Bhushan, J. (Chairperson)<\/span> and Barun Mitra (Technical Member)<\/span>, disposed of the appeal, stating that<\/span> the issue of a pre-existing dispute had been raised but was rejected by the Adjudicating Authority.<\/span> Both the Corporate Debtor (Appellant) and Respondent 1 had filed affidavits which confirmed that they had entered into a settlement, which was taken on record. Thus, the application under Section 9 of the IBC was closed.<\/p>\n

Background:<\/h3>\n

The Appellant had been running a hospital in a rented premise taken from Respondent 1, and there was a subsequent registered lease deed. Due to default in rent payment, Respondent 1 had filed a case before the Additional District Magistrate seeking rent. The case was dismissed, allowing liberty to file a fresh eviction suit. After that, a Demand Notice was issued, which was not replied to by the Appellant.<\/p>\n

So, Respondent 1 had filed an application under Section 9 of the IBC. The Appellant contested the application, raising the issue of a pre-existing dispute and other grounds. However, the Adjudicating Authority, through the impugned order, admitted application under Section 9 of the IBC.<\/p>\n

The Appellant submitted that there had been pre-existing dispute between the parties regarding the lease rental, so the application under Section 9 of the IBC should not have been admitted. It was further mentioned that the letter dated 13-8-2022 issued by the Appellant also showed that there had been issues between the parties. Also, Respondent 1 had filed a suit under Section 23 of the IBC for the same amount, which was later dismissed, and had then initiated the proceedings under Section 9 of the IBC. The Appellant had further stated that although the Adjudicating Authority had observed that the amount claimed appeared to be inflated, the application was still admitted. Both the Appellant and Respondent 1 filed affidavits confirming that all the issues between them had been resolved, including the payment of GST.<\/p>\n

Respondent 1 contended that the suit under Section 23 of the IBC was not dismissed on merits and that the letter dated 13-8-2022, relied on by the Appellant, could not be considered as proof of a pre-existing dispute.<\/p>\n

Law, Analysis and Decision:<\/h3>\n

The Tribunal held that there had been issues between the parties prior to the issuance of Demand notice, concerning Respondent 1 entitlement to rent.<\/p>\n

Further, the Tribunal concurred that in the impugned order, the Adjudicating Authority had noted that the rent charged appeared prima facie<\/span> to be inflated and had accrued during the period covered under Section 10-A of the IBC.<\/p>\n

The Tribunal further held that the issue of pre-existing dispute had been raised but was turned down by the Adjudicating Authority. Despite the contentions raised by the Appellant, the Appellant had entered into a settlement with the Operational Creditor to discharge the dues. Both the Appellant and Respondent 1 had filed affidavits confirming the settlement, which were taken on record. Accordingly, the Tribunal stated that the application under Section 9 of the IBC ought not to have been admitted.<\/p>\n

In view of the above, the Tribunal found no reason to keep the appeal pending. Thus, the proceedings under Section 9 of the IBC were closed. The Appellant had undertaken to pay Rs. 4.5 lakhs to the Insolvency Resolution Professional, which was to be done within two weeks by a Bank Draft. The Appellant had also submitted that payment to Respondent 1 would be made as per the terms of the settlement between the parties, and accordingly, the appeal was disposed of.<\/p>\n

[G.V. Meditech (P) Ltd. v. Prime Tower (Firm), 2025 SCC OnLine NCLAT 1512<\/a>, decided on 12-9-2025<\/span>]<\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For Appellant:<\/span> Arun Kathpalia, Senior Advocate with Sanjana Saddy, Advocate<\/p>\n

For Respondents:<\/span> Shivam Kumar, Upasana Singh, Udai Chandani, Aditya Survanshi, Advocates for Respondent 1<\/p>\n

Abhishek Naik, Advocate for Respondent 2<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Despite the contentions raised by the Appellant, Appellant entered into settlement with the Operational Creditor to discharge his dues, which has been filed by an Affidavit by the Appellant as well as 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