Reyas Paper Limited (RPL) was incorporated in 2005. The promoters of the RPL had put their maximum effort and energy for 10 years to set-up this paper plant. However, the RPL was unable to generate profits and could not

The facts of the case are similar to that of the Y. Shivram Prasad & Ors. Vs. S. Dhanapal & Ors. (Company Appeal (AT) (Insolvency) No. 224 of 2018 dated 27 February, 2019) . In this case, the NCLAT passed the impugned order of liquidation as Committee of Creditors did not find any resolution plan viable and feasible. The promoters submitted that they should have been given an opportunity to settle the dues. While rejecting the said submission, the NCLAT clarified that settlement can be made only at three stages, i.e., Before admission of application under Sections 7 or 9 or 10. After settlement if reached by Promoters / shareholders with the Applicant but before the constitution of the 'Committee of Creditors' in view of decision of the Hon'ble Supreme Court in "Swiss Ribbon Pvt. Ltd. & Anr. v. Union of India & Ors. Writ Petition (Civil) No. 99/2018 (2019 SCC OnLine SC 73)" In terms of Section 12A of the Insolvency and Bankruptcy Code, 2016. And such stages were over in this instant matter. It, however, observed that during the liquidation process, it is necessary to take steps for revival and continuance of the Corporate debtor by protecting it from its management and from a death by liquidation. The NCLAT upheld the NCLT's decision, ruling that the promoter's ineligibility under Section 29A extended to the process of compromise and arrangement under Section 230 during liquidation. In essence, the case highlights the principle that the control of a corporate debtor should not be returned to the same entity that contributed to its insolvency, even during the liquidation process. Therefore, the promoter's application to settle the dues through compromise or arrangement cannot be entertained after the order of liquidation.