CIRP may be stayed to facilitate a bona fide settlement where substantial part-payment is already made.

The Appellant, a suspended director of the Corporate Debtor (CD), challenged NCLT orders reviving Corporate Insolvency Resolution Process (CIRP) after a prior withdrawal.

The CD had stood as a corporate guarantor for Non-Convertible Debentures (NCDs) issued by Kindle Infraheights to Respondent No. 3.

Following Section 7 admission, the parties entered a Settlement Agreement on 09.05.2025 for ₹210 crore, leading to the withdrawal of CIRP under Section 12A on 31.07.2025.

After paying ₹120 crore, a dispute arose regarding the timeline for the third tranche of ₹25 crore because the NCLT order was uploaded late (26.08.2025).

Although the ₹25 crore was eventually paid and accepted, the Financial Creditor (FC) moved a Restoration Application (RA 83/2025) alleging default.

On 07.01.2026, the NCLT restored the CIRP but granted a 10-day "reverse CIRP" window to settle the remaining ₹90 crore.

The CD sought a 90-day extension via I.A. 312/2026, citing difficulties in monetizing assets due to missing original title deeds.

The NCLT granted only two weeks (until 04.02.2026), leading to this appeal.

1. Whether the Adjudicating Authority erred in reviving the CIRP when a substantial portion of the settlement amount had been paid and the default was subsequently cured.

2. Whether the Corporate Debtor was entitled to a reasonable extension of 90 days to pay the balance settlement amount of ₹90 crore to achieve the objectives of the IBC.

The Court applied Section 12A of the IBC regarding the withdrawal of applications.

It primarily relied on the Supreme Court's holdings in *Swiss Ribbons Pvt. Ltd. v. Union of India*, emphasizing that the IBC's focus is the revival of the CD, not mere recovery.

And *Anuj Jain v. Axis Bank Ltd.*, which defines the "parental and nursing role" of Financial Creditors in restructuring.

Furthermore, it applied the principle from *E.S. Krishnamurthy v. Bharat Hi-Tech Builders Pvt. Ltd.*, stating that settlements must be encouraged to facilitate the rehabilitation of the CD.

The Court also exercised its discretion under Rule 11 of the NCLT Rules, 2016, to meet the ends of justice.

The Appellate Tribunal reasoned that while the FC has the right to revive insolvency proceedings upon default, the "pivotal role" of the FC involves ensuring the CD's viability rather than acting solely as a recovery agent.

The Court noted that of the ₹210 crore settlement, ₹120 crore had already been paid and accepted.

The delay in the third tranche was relatively minor and linked to the late uploading of the NCLT's withdrawal order.

Crucially, the CD's inability to pay the final ₹90 crore was tied to the unavailability of original title deeds required for investor due diligence—a factor the RP had to rectify by obtaining duplicates from the Noida Authority.

Given that the CD demonstrated *bona fide* intent to settle and the FC is the sole creditor, the NCLAT found that the NCLT's refusal to grant more than two weeks was too restrictive and frustrated the objective of CD rehabilitation.

The Court held that sufficient cause existed to grant the CD a 90-day extension from the date of the judgment to pay the balance ₹90 crore in terms of the Settlement Deed.

It ordered that if the payment is made within this period, the CIRP shall stand terminated and the withdrawal order dated 31.07.2025 shall remain operative.

The FC and RP were directed to assist the CD in implementing the settlement.