In this podcast, we have explored how, despite not being a statutory remedy, the revival of Insolvency proceedings is permitted if the same was withdrawn pursuant to a settlement. We have discussed the process of revival. The process of revival would only arise if the terms of the settlement pursuant to which the IBC Proceeding was withdrawn, have not been honoured by the parties to the said settlement. We have further examined the concept of ‘liberty’ that is required in the National Company Law Tribunal’s order vide which the withdrawal of the IBC Proceeding was permitted. We further went on to examine the effect of the settlement agreement on the nature of debt if the settlement was entered between the parties after the IBC Proceeding was initiated. We have concluded that (a) revival of IBC Proceeding is permitted on certain conditions; (b) by virtue of entering into Settlement after IBC Proceeding is initiated would not change the nature of the debt.
Link: Revival of insolvency proceedings: Analysis and way forward | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)
Source: An article published on the LKS website in June 2023
Authors: Aman Gupta Mayank Kumar
Voice: Pratyush Jain and Falguni Gupta