2019 (7) TMI 1713 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - whether Section 12-A Application can be filed by the largest Creditor of the Committee of Creditors and whether requisite 90% is fulfilled or not? HELD THAT - The power to accept Application for withdrawal of Petition/Application is vest with Committee of Creditors and finally with Adjudicating Authority. Therefore there is no bar for the Committee of Creditors to the file withdrawal Application by themselves or through IRP. In instant case, the original Petitioner is not interested to file an Application for withdrawal even though the Corporate Debtor has given cheque for the admitted amount and thus it is just and proper to accept the instant application in the interest of justice. Therefore the contention of the Financial Creditor that the Petitioner alone has the Authority to file Withdrawal Application and none other him has right to file the Application for Withdrawal U/s 12A of Code is not at all tenable and liable to be rejected. And the Adjudicating Authority is empowered to permit any Applicant to file an Application U/s 12-A of the Code and can consider it. Application is allowed by permitting the Applicant to withdraw the main Company Petition - Company petition is dismissed.

Summary

Issues Involved:
1. Application for withdrawal of the Company Petition under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Validity of the authorization to file the withdrawal application.
3. Compliance with the requisite 90% voting share for withdrawal.
4. Acceptance of the admitted claim amount by the Financial Creditor.

Issue-Wise Detailed Analysis:

1. Application for Withdrawal of the Company Petition:
The Committee of Creditors (CoC) filed I.A. No. 244/2019 seeking withdrawal of the Company Petition (C.P. (IB) No. 46/BB/2018) under Section 12A of the IBC, 2016. The petition was initially filed by a Financial Creditor to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for a default amount of ?5,02,23,791. The CoC decided not to continue the CIRP and filed the withdrawal application with a voting share of 89.85%, including Home Buyers.

2. Validity of the Authorization to File the Withdrawal Application:
The Financial Creditor opposed the application, arguing that the authorization given to file the withdrawal application was not in accordance with the law. The Tribunal clarified that the CoC, as per its order dated 11.03.2019, was permitted to file the application under Section 12A. The Tribunal held that the CoC has the authority to file the withdrawal application, and the original Petitioner does not have the exclusive right to do so.

3. Compliance with the Requisite 90% Voting Share:
The Financial Creditor contended that the required 90% voting share was not met. The Tribunal referred to the General Clauses Act, which allows rounding off percentages, and determined that 89.85% can be rounded off to 90%. Additionally, the Home Buyers constituting 10.15% did not oppose the proposal, indirectly indicating no objection. The Tribunal cited the Supreme Court judgment in Anup Prakash Vyas vs. University of Pune, which supports the application of rounding off based on logic and common sense.

4. Acceptance of the Admitted Claim Amount by the Financial Creditor:
The IRP scrutinized all claims and found the Financial Creditor entitled to ?90,29,491. The Corporate Debtor offered a cheque for this amount, but the Financial Creditor refused to accept it, insisting on continuing the CIRP or proceeding to liquidation. The Tribunal noted that the Financial Creditor's claim was verified and accepted for ?90,29,491, and since the claim amount was not challenged, the Financial Creditor could not maintain the original petition. The Tribunal emphasized that the power to accept withdrawal applications lies with the CoC and the Adjudicating Authority, as per the Supreme Court judgment in Swiss Ribbons Private Limited vs. Union of India.

Conclusion:
The Tribunal allowed the withdrawal application, dismissed the main Company Petition, and permitted the Financial Creditor to collect the cheque deposited with the Registry. The Tribunal held that the CoC was authorized to file the withdrawal application, the requisite 90% voting share was effectively met, and the Financial Creditor's contention was not tenable. The decision was made in the interest of justice, ensuring compliance with the IBC and relevant legal precedents.