2019 (12) TMI 1375 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of petition - It is the case of the Interim Resolution Professional that this Tribunal admitted the petition filed under Section 9 of IBC, 2016 on 04.10.2019 for initiation of CIRP, granting moratorium and appointment of IRP - HELD THAT - This Application is filed under Section 12A of I B Code, 2016, Read with 30 A (1)(a) of the Insolvency and Bankruptcy (Corporate insolvency Resolution process) Regulations, 2016. The Petition filed under Section 9 by the Operational Creditor was admitted by this tribunal on 04.10.2019 and ordered Corporate Insolvency Resolution Process against Corporate Debtor. Interim Resolution Professional reported to the Tribunal that Parties settled the matter and requested the tribunal to withdraw the Petition - IRP has stated that he has enclosed the copies of DD's acknowledged by operational creditor and copy of settlement including Form FA. Thus the procedure prescribed under Regulation 30A (1) (a) of IBBI (Insolvency Resolution Process for Corporate Persons), 2016 has been followed. This Adjudicating Authority has power under Section 12A Read with Regulation 30A (1)(a) of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 to permit for withdrawal of the application even after admission of the Petition. Application allowed.

Summary

Issues: Application for withdrawal of Company Petition under Section 12A of I&B Code

Analysis:
1. The Interim Resolution Professional (IRP) filed an application seeking permission to withdraw the Company Petition under Section 12A of the Insolvency and Bankruptcy Code, 2016, along with Regulation 30A (1)(a) of the Insolvency and Bankruptcy Code (CIRP) Regulations, 2016.

2. The IRP informed the Tribunal that the petition filed under Section 9 of the IBC was admitted, initiating the Corporate Insolvency Resolution Process against the corporate debtor. Despite compliance with relevant sections and regulations, no claims were received, and the Committee of Creditors (COC) was not constituted.

3. Both parties reached a settlement, with the corporate debtor paying an amount of ?6,50,000 towards full and final settlement of a claim amounting to ?13,53,951 along with interest. The IRP also received ?84,000 towards costs.

4. The IRP cited the Hon'ble Supreme Court's observation regarding the Adjudicating Authority's power to allow withdrawal applications in cases where the COC is not constituted, as per Rule 11 of the NCLT Rules, 2016.

5. The IRP followed the procedure outlined in the amended Regulations, specifically Regulation 30A(1)(a), and submitted all necessary documents, including the withdrawal application and settlement details.

6. The IRP's application was based on Section 12A of the I&B Code, read with Regulation 30A(1)(a) of the Insolvency Resolution Process for Corporate Persons, granting the Adjudicating Authority the power to permit withdrawal even after petition admission.

7. Consequently, the Tribunal allowed the IRP's application, withdrawing the Corporate Insolvency Resolution Process against the corporate debtor and lifting the moratorium order, enabling the company to resume independent operations under its Board of Directors immediately.