The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, set aside the admission of Corporate Insolvency Resolution Process (CIRP) against Monte Carlo Ltd., holding that the insolvency proceedings deserved to be closed as the operational creditor’s claim had been fully settled, no other creditor’s claim remained outstanding, and the material on record indicated the existence of a pre-existing dispute prior to the issuance of the demand notice under Section 8 of the Insolvency and Bankruptcy Code (IBC).
The appeal was filed by the suspended director and promoter of the corporate debtor challenging the NCLT Ahmedabad’s order admitting a Section 9 application filed by an operational creditor over a claim of ₹1.47 crore. The appellant contended that the corporate debtor was a financially sound and profitable company with a net worth of ₹1,962 crore, and that insolvency had been triggered despite the dispute involving a relatively small operational debt. It was further alleged that the transportation contract had been procured through bribery of one of the company’s employees and that there had always been a genuine dispute regarding the transportation distance used for billing, which was supported by a joint physical verification, GPS data and Google Maps.
During the appellate proceedings, the corporate debtor deposited ₹1.50 crore before the NCLAT. The Tribunal had earlier stayed further CIRP proceedings and clarified that the admission order should not adversely affect the company’s participation in public tenders while the appeal remained pending.
Subsequently, the parties entered into a Settlement Agreement dated 25 July 2026, under which the operational creditor acknowledged that its entire claim had been fully and finally satisfied and unconditionally consented to setting aside the insolvency admission order. The Interim Resolution Professional (IRP) also informed the Tribunal that the only other claim received during CIRP was an EPFO claim of ₹2.98 lakh, which had likewise been paid in full, leaving no surviving claims from any creditor. The corporate debtor also produced a communication from the Bank of Baroda confirming that its account remained standard with no overdue amounts.
The Appellate Tribunal observed that the appellant had consistently pleaded the existence of a prior dispute concerning measurement of transportation distance and that the operational creditor had neither effectively controverted those assertions nor opposed the setting aside of the insolvency order. The Tribunal further noted allegations that the contract itself had been procured through bribery of a company employee, which had led to registration of an FIR, reinforcing the appellant’s case that the dispute pre-dated the statutory demand notice under Section 8 of the IBC.
Relying on its earlier decisions, including Rajeev Goyal v. Sankalp Siddhi Developers Pvt. Ltd, Comp. App. (AT) (Ins.) No. 846/2025., and the Supreme Court’s decision in GLAS Trust Company LLC v. BYJU Raveendran, Civil Appeal No. 9986 of 2024, the NCLAT held that where parties have settled their disputes, all admitted claims stand discharged, and no creditor remains unpaid, the appellate tribunal can exercise its inherent powers to close the CIRP.
Accordingly, the NCLAT allowed the appeal, set aside the NCLT’s order admitting the Section 9 application, directed that the CIRP against Monte Carlo Ltd. be closed, ordered that CIRP costs and the IRP’s fees be borne by the corporate debtor in terms of the settlement agreement, and directed the Registry to return the ₹1.50 crore demand draft deposited by the appellant, as the operational creditor had already received full payment of its claim.
