NCLAT allows withdrawal of insolvency case against Oswal Overseas after settlement with creditor
NCLAT permits withdrawal of insolvency proceedings against Oswal Overseas following settlement with creditor LH Sugar Factories.Summary
The National Company Law Appellate Tribunal (NCLAT) has approved the withdrawal of an appeal against the insolvency proceedings initiated against Oswal Overseas, following an amicable settlement with its financial creditor, LH Sugar Factories. A joint application was filed by Oswal Overseas and LH Sugar Factories, detailing the settlement terms and a demand draft of Rs 2.80 crore paid to the creditor. The settlement effectively discharged the financial debt owed to LH Sugar Factories. The NCLAT also modified its earlier interim order to allow the Interim Resolution Professional to verify and collate claims, constitute the Committee of Creditors, and postpone further steps such as inviting Expressions of Interest until the National Company Law Tribunal (NCLT) disposes of the withdrawal application under Section 12A of the Insolvency and Bankruptcy Code. Additionally, the NCLAT dismissed an appeal by Paramjeet Singh, the suspended managing director of Oswal Overseas, challenging the insolvency proceedings. The case illustrates how settlements between a corporate debtor and its financial creditor can lead to the withdrawal of insolvency proceedings, provided the conditions are formally recorded and approved by the appellate tribunal.
(Source：The Economic Times)