SC allows two firms to settle loan dispute:

SC allows two firms to settle loan dispute:

Context

• The Supreme Court used its extraordinary constitutional powers to allow two companies to withdraw from insolvency proceedings and settle their loan dispute, despite the case being admitted to the National Company Law Tribunal (NCLT).

The turn of events

• If the NCLT acknowledges a case for initiating corporate insolvency resolution process under the Insolvency and Bankruptcy Code of 2016, it cannot be withdrawn even if the parties decide to settle the dispute between them.
• In sudden turn of events, a Bench of Justices used the Supreme Court’s powers to do “complete justice” under Article 142 of the Constitution to bring quietus to the financial dispute between Lokhandwala Kataria Construction Pvt. Ltd. and Nisus Finance and Investment Manager LLP.
• The court took on record the consent terms entered into by the companies and their undertaking to abide by them in settling the amounts due.