2019 (3) TMI 1591 - Tri - Insolvency and Bankruptcy

Permission to withdraw the CIRP process initiated against the Corporate Debtor - HELD THAT - It is pertinent to mention that after getting the application under Section12A of the Code when Resolution professional asked the CoC to provide him with the details of OTS offer sources of funds the timeframe for payments to each lender compliance with RBI norms and whether the interest of all stakeholders / CoC members have been provided for under the OTS offer then Andhra Bank informed the Resolution professional that they will directly address the issue with the Tribunal and did not submit any information to the Resolution professional - It is pertinent to mention that the promoters of the Corporate Debtor are absconder and we often get the news from the newspaper that various Government agencies like Enforcement Directorate CBI and other agencies are unable to trace the Promoters of the Corporate Debtor. Notices along with the copy of this order may be given to the concerned authorities within seven days from today so that if they want to make any representation they can make the same. Notices to the concerned authorities may be communicated by speed post as well as by way of email - Registry is directed to comply with the above order and submit the report by 5 00 p.m. today. List on 26.3.2019.

Summary

Issues involved:
1. Application for withdrawal under Section 12A of IBC, 2016.
2. Compliance with CIRP regulations for filing withdrawal application.
3. Acceptance of OTS offer and subsequent proceedings.
4. Voting results for withdrawal of CIRP and liquidation resolution.
5. Concerns regarding the absconding promoters and OTS proposal legitimacy.
6. Notice issuance to Central Government and other authorities for representations.

Analysis:
1. The application filed under Section 12A of the Insolvency and Bankruptcy Code, 2016 seeks permission to withdraw the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor. The provision allows withdrawal of applications admitted under Section 7, 9, or 10, subject to certain conditions.

2. The CIRP Regulation 30A outlines the procedure for filing a withdrawal application, including submission to the interim resolution professional or resolution professional in a specified form. The application must be accompanied by a bank guarantee for estimated costs incurred until the date of application. The committee's approval with ninety percent voting share is necessary for submission to the Adjudicating Authority.

3. The progress report indicates the acceptance of a revised offer for a one-time settlement (OTS) of financial debt by the Corporate Debtor's promoters. The Committee of Creditors (CoC) instructed the Resolution Professional to defer the publication of advertisement seeking resolution applicants. Subsequent proceedings involved voting on withdrawal of CIRP, approval of a resolution plan, and a resolution for liquidation.

4. The voting results revealed that the withdrawal of CIRP and the resolution plan submitted by a party were rejected by the CoC. This led to a resolution for liquidation, which was also rejected. A fresh resolution for withdrawal of CIRP received majority approval, highlighting the evolving decisions of the CoC.

5. Concerns were raised regarding the absconding promoters of the Corporate Debtor, the legitimacy of the OTS proposal, and the acceptance of funds from private investors. The application included details of the OTS proposal and the signatory, raising questions about authorization and legitimacy.

6. In light of the above issues, the Tribunal decided to issue notices to various government agencies and authorities, including the Central Government, Enforcement Directorate, CBI, and others. This step aimed to allow these entities to make representations before further orders were passed on the withdrawal application, ensuring transparency and compliance with legal procedures.