Parker Hannifin India Private Limited v/s Prowess International Private Limited (IA No. 226/KB/2017 in C.P. 150 of 2017) - Synopsis
Team SoOLEGAL 22 Feb 2021

FACTS:
In this case, Parker Hannifin India Private Limited v/s Prowess International Private Limited (IA No. 226/KB/2017 in C.P. 150 of 2017), Parker Hannifin India Private Limited had filed an application against Prowess International Private Limited for the commencement of a corporate insolvency resolution procedure under Sections 8 and Section 9 of the Insolvency Bankruptcy Code, 2016. On 20th April 2017, the National Company Law Tribunal, Kolkata Bench had approved the above-mentioned petition and, appointed an interim insolvency resolution expert, and also had announced a moratorium, and directed for public announcement. The public statement was made pursuant to the above-mentioned order and the progress report was submitted by the Insolvency Resolution Professional. An application was then lodged with the NCLT for dismissal of the petition on the grounds of a settlement reached between Parker Hannifin India Private Limited and Prowess International Private Limited.

DECISION OF THE COURT:
The Bench by dismissing the application for withdrawal of the petition had stated that after the petition had been approved, it acquires the character of a representative suit because, by publication in the newspaper, other creditors have the right to engage in the insolvency resolution process and, thus, the petition cannot be rejected on the grounds of a settlement between the operational creditor and the corporate debtor. The Bench had also stated that, for the purposes of Section 9(5)(ii)(b) of the Insolvency Bankruptcy Code, 2016, if the repayment of the loan sum is rendered by the corporate debtor, the NCLT has the discretion to refuse the petition, before admission of the petition.

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