Case Overview

This appeal was filed by Mrunal Kanubhai Patel, the suspended director and promoter of Monte Carlo Limited (the Corporate Debtor or CD), challenging the judgment and order dated 6th July 2026 passed by the National Company Law Tribunal (NCLT), Ahmedabad Bench (Court-II) in CP (IB) No. 246 of 2025. The NCLT had accepted a petition filed by the operational creditor, Vanshita Transport (through its proprietor Nilesh V. Thakkar), and initiated the Corporate Insolvency Resolution Process (CIRP) against Monte Carlo Limited.

The principal dispute concerned a debt of Rs. 1,47,83,503/- related to transportation services. The appellant contended that a genuine prior dispute existed regarding the measurement of distance for the Bhagalpur route. The corporate debtor's case was that billing was done for a distance of 825 km each way, but a joint physical verification held on 17th February 2025 in the presence of police authorities and the operational creditor's proprietor measured the distance as 750.2 km, corroborated by GPS data (~763 km) and Google Maps.

A significant allegation was that the work order was procured through collusion, where an employee of the appellant allegedly accepted a bribe of Rs. 10 lakhs from the operational creditor to secure the contract at rates (Rs. 1.69 per km) higher than established market rates. An FIR was stated to have been lodged against the employee.

Final Outcome

The NCLAT allowed the appeal and set aside the NCLT's impugned order dated 6th July 2026. The CIRP against Monte Carlo Limited was closed. This decision was based on two primary grounds:

1. The parties had reached an amicable settlement, formalized in a Settlement Agreement dated 25th July 2026. The operational creditor received full payment of its claim (Rs. 1.47 crore) and irrevocably consented to the quashing of the NCLT order.

2. The Tribunal found merit in the appellant's contention regarding the existence of a prior dispute, which it believed was not adequately considered by the NCLT.

Additional factors influencing the decision included:

  • The corporate debtor's strong financial position, with a net worth of Rs. 1,962 crores and audited net profits of Rs. 205.59 Cr, Rs. 259.31 Cr, and Rs. 231.30 Cr in the last three financial years, and an IND AA-/Positive credit rating.
  • The Interim Resolution Professional (IRP) reported that the public announcement yielded only one other claim, from the Employees' Provident Fund Organisation (EPFO) for Rs. 2.98 lakhs, which had already been settled in full by the corporate debtor.
  • A communication from Bank of Baroda confirmed the corporate debtor's account was "standard and regular" with no overdues.

Consequential Directions:

  • All costs of the CIRP, including the fees and expenses of the IRP (Respondent No. 2), are to be borne by the corporate debtor/appellant as per the settlement agreement (Clause 4.5).
  • The NCLAT registry was directed to return a demand draft for Rs. 1.50 crore (No. 003531 dated 10.07.2026, Axis Bank) that the appellant had deposited as a show of bona fide, as the debt had been settled directly.

Topics: Insolvency Appeal, Debt Settlement, Prior Dispute