NCLAT says Settlement Agreement Does Not Extinguish Operational Debt

Ashiana Ispat owed ₹5.73 crore to Mani Mahesh Ispat for supplies of steel products. Although the parties subsequently agreed to settle the dues through sale of an immovable property, the arrangement was conditional on payment of the outstanding debt and the property was never transferred. NCLAT held that there was no genuine pre-existing dispute and no novation under Section 62 of the Contract Act, and upheld admission of the Section 9 CIRP.