Lokhandwala Kataria Construction Private Limited v. Nisus Finance And Investment Managers Llp .

Factual and Procedural Background

The opinion concerns an appeal arising from an order of the National Company Law Appellate Tribunal (NCLAT) dated 13-7-2017 (2017 SCC OnLine Nclat 406). The appeal was heard with learned Senior Counsel appearing for the parties. The dispute before the appellate court centered on whether a compromise could be permitted before the NCLAT after admission of the matter.

Legal Issues Presented

1. Whether, in view of Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, the NCLAT could use the inherent power under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 to allow a compromise between the parties after admission of the matter.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court noted that the appeal raised a question about the interaction between Rule 8 of the 2016 Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules and the inherent power recognized by Rule 11 of the NCLAT Rules, 2016 to permit a compromise post-admission. It observed that the NCLAT, by its impugned order, had held that such inherent power could not be utilized for allowing a compromise after admission, and the court stated that, prima facie, this appeared to be the correct legal position.

Nonetheless, because all parties were present before it, the court invoked its powers under Article 142 of the Constitution of India to bring finality to the dispute. It took on record the Consent Terms dated 28-6-2017 and 12-7-2017, recorded the appellant's undertaking to abide by the Consent Terms in full, and noted the appellant's undertaking to pay the sums due on or before the dates stipulated in those terms.

Holding and Implications

DISPOSED OF: The appeal was disposed of after the court invoked Article 142, took the parties' Consent Terms on record, and recorded the appellant's undertakings to comply with them, including timely payment as specified.

The direct effect is that the dispute stood concluded on the basis of the recorded Consent Terms and undertakings, and the court held that nothing further survived in the appeal. The opinion does not indicate that any new precedent was set beyond resolving the matter between the parties through Article 142.