2019 (10) TMI 1341 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - It is matter of record that the Operational Creditor has moved this withdrawal application by settling its dues for an amount of 19, 94, 800/- as full and final settlement has been arrived at between the parties prior to the formal constitution of the CoC. Therefore this Adjudicating Authority is bound by the above referred decision of Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT read with the decision of Hon ble NCLAT in MR. ASHISH GARODIA VERSUS IMPACT EVENT MANAGEMENT ANR. 2019 (2) TMI 1607 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI. to accept such settlement at the post-admission of the present IB Petition. Hence it is hereby accepted. The present IA is allowed. The amount of the cost will be payable to the IRP within four weeks by the petitioner and corporate debtor jointly or severally from the date of receipt of an authentic copy of this order. They shall furnish proof of payment through the IRP to the Registry of this Tribunal thereafter the present IA deemed to be allowed - Application allowed.

Summary

Issues:
Withdrawal of IB Petition under Section 12A of the Insolvency and Bankruptcy Code, 2016 and recalling the process of Corporate Insolvency Resolution.

Analysis:
The Operational Creditor filed an application seeking withdrawal of the IB Petition and recalling the Corporate Insolvency Resolution process concerning the Corporate Debtor. The Corporate Debtor approached the applicant, offering settlement through post-dated cheques totaling ?19,94,800. An undertaking was provided by the Corporate Debtor acknowledging the debt and proposing settlement. The applicant relied on judicial precedents, including the Swiss Ribbons case, to argue for withdrawal without CoC consent. The IRP had no objection to the withdrawal. The Adjudicating Authority accepted the settlement due to the pre-CoC settlement, directing the parties to bear IRP and CIRP costs for approval. Failure to pay within the stipulated period would allow the IRP to seek non-payment remedies. The IA for withdrawal was conditionally allowed, leading to the withdrawal of the IB Petition.

In summary, the judgment allowed the withdrawal of the IB Petition and the recall of the Corporate Insolvency Resolution Process based on a pre-CoC settlement between the Operational Creditor and the Corporate Debtor. The decision was supported by legal precedents and required the parties to bear IRP and CIRP costs for approval. Failure to pay within the specified period would lead to further actions by the IRP.