The National Company Law Appellate Tribunal (NCLAT) has revived insolvency proceedings against Chintamani's Jewellery Arcade Pvt Ltd after finding the company materially breached its settlement agreement with Axis Bank. According to reports from Business Standard and The Economic Times, a three-member NCLAT bench recalled its earlier order passed on May 9, 2024 that set aside the insolvency admission against the company and restored it to its original position. The corporate insolvency resolution process (CIRP) against the Mumbai-based jewellery company was consequently revived before the National Company Law Tribunal (NCLT), Mumbai. As per the latest NCLAT order, the tribunal emphasized that the very foundation on which the appeal was disposed of having failed, the applicant is entitled to invoke the liberty expressly reserved by this Tribunal.
As reported by Business Standard, the NCLAT bench comprising Justice N Seshasayee, Arun Baroka, and Indevar Pandey stated that the record clearly establishes the company failed to adhere to the repayment schedule forming part of the consent terms. The bench emphasized that the breach is neither technical nor insignificant but substantial and continuing. The tribunal noted that the very foundation on which the appeal was disposed of having failed, the applicant is entitled to invoke the liberty expressly reserved by this Tribunal.
According to Business Standard, the parties entered into settlement terms on April 27, 2024 under which the company paid ₹1.5 crore upfront and agreed to repay remaining dues through a structured repayment schedule. The NCLT had admitted the insolvency petition on February 23, 2024 and appointed an interim resolution professional. During the pendency of the appeal, the parties entered into settlement terms, and taking the settlement on record, the NCLAT on May 9, 2024 set aside the CIRP admission order and closed the insolvency proceedings while granting liberty to Axis Bank to revive the appeal in case of any default.
As reported by Business Standard, Axis Bank later moved a restoration application, alleging that the company failed to honour the agreed repayment schedule. The bank submitted that against dues of ₹3.30 crore falling due between July and December 2024, only ₹70 lakh had been paid, while several instalments remained unpaid. The bank had extended various credit facilities to Chintamani's Jewellery Arcade, which later defaulted on repayments, leading to the initial insolvency petition under Section 7 of the Insolvency and Bankruptcy Code before the NCLT Mumbai.
