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

The Corporate Debtor (CD), Nobal Buildtech Pvt. Ltd., acted as a corporate guarantor for loans raised by Kindle Infraheights Pvt. Ltd. from Asia Pragati Strategic Investment Fund/Orbis Trusteeship Services (Financial Creditors).

Following a default, Section 7 CIRP was initiated against the CD.

During the appeal process, the parties entered into a Settlement Agreement dated 09.05.2025 for ₹210 crore.

Consequently, the NCLT allowed the withdrawal of CIRP under Section 12A on 31.07.2025.

However, a delay in uploading the order led to a dispute over the payment timeline for the third tranche of ₹25 crore.

The Financial Creditor (FC) moved a Restoration Application (RA 83/2025) for revival of CIRP.

Although the ₹25 crore was eventually paid and accepted, leaving a balance of ₹90 crore, the Adjudicating Authority (AA) revived the CIRP on 07.01.2026 but granted a 10-day stay for the CD to pay the balance.

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

The AA granted time only until 04.02.2026.

The Appellant challenged these orders.

The Court relied on Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016, regarding the withdrawal of applications.

It emphasized the primary objective of the IBC as the "revival and continuation of the corporate debtor" rather than mere recovery, as established in *Swiss Ribbons Pvt. Ltd. v. Union of India*.

The Court further applied the principle from *Anuj Jain v. Axis Bank Ltd.*, noting that Financial Creditors have "parental and nursing roles" to ensure the viability of the CD.

It also cited *E.S. Krishnamurthy v. Bharat Hi-Tecch Builders Pvt. Ltd.*, which held that settlements must be encouraged to facilitate the rehabilitation of the CD.

Finally, the Court invoked Rule 11 of the NCLT Rules, 2016, regarding inherent powers to meet the ends of justice.

The Court observed that out of the total settlement of ₹210 crore, the CD had already paid ₹120 crore, demonstrating bona fide intent.

The dispute regarding the ₹25 crore tranche was largely procedural, stemming from the delay in uploading the NCLT's withdrawal order.

The Court found that the CD’s inability to pay the final ₹90 crore was linked to the unavailability of original title deeds required for investor due diligence—a fact the Resolution Professional (RP) eventually confirmed by seeking duplicates from the Noida Authority.

Applying *Swiss Ribbons*, the Court reasoned that since Orbis was the sole Financial Creditor, its "pivotal role" should be facilitating the CD’s survival rather than pushing for a "hostile takeover" through revival of CIRP.

The Court determined that the AA’s grant of only two weeks was insufficient given the complexities of asset monetization and that a 90-day extension was a "reasonable and limited period" to achieve the IBC's goal of rehabilitation.

The Court held that sufficient cause existed to grant the 90-day extension prayed for in I.A. 312/ND/2026.

It directed that if the Appellant pays the balance ₹90 crore within 90 days from the date of the judgment, the order withdrawing CIRP dated 31.07.2025 shall become operative and CIRP shall stand terminated.

The FC and RP were directed to provide necessary assistance to the CD to implement the Settlement Deed.