2019 (12) TMI 1389 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of petition - non-constitution of CoC - Applicant submits that claims no claims were received and hence COC is not constituted - Amicable Settlement - HELD THAT - The Hon'ble Supreme Court in the matter of SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT where it was held that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case. This case is a fit case for the Adjudicating Authority to invoke Rule 11 of NCLT Rules and accordingly the Order of CIRP passed in this Petition is recalled and the IRP is discharged from his duties - Petition disposed off.

Summary

Issues:
Withdrawal of C.P. No. 553 of 2019 under Section 12A of the Insolvency and Bankruptcy Code, 2016 due to lack of claims and non-constitution of Committee of Creditors (COC).

Analysis:
The application was filed by the Interim Resolution Professional (IRP) under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking withdrawal of C.P. No. 553 of 2019. The IRP, Mr. Rajesh Shah, highlighted that the Corporate Debtor had settled the matter with the parties, and no claims were received within the stipulated timeline for the constitution of the Committee of Creditors (COC). The Counsel for the Corporate Debtor submitted consent terms and requested the withdrawal of the petition due to the absence of a constituted COC.

The Tribunal considered the submissions and referred to the Hon'ble Supreme Court's decision in the matter of "Swiss Ribbons Pvt. Ltd. & Another vs. Union of India & Others." The Supreme Court's order emphasized the necessity of consulting the overseeing body, i.e., the COC, before allowing individual corporate debtors to settle claims in a collective proceeding. The Court clarified that in cases where the COC is not yet constituted, parties can directly approach the NCLT for withdrawal or settlement, subject to the Tribunal's discretion under Rule 11 of the NCLT Rules, 2016.

In light of the Supreme Court's directive and the absence of a constituted COC, the Adjudicating Authority invoked Rule 11 of the NCLT Rules and recalled the Order of Corporate Insolvency Resolution Process (CIRP) passed in the petition. Consequently, the IRP was discharged from duties, and the Corporate Petition (CP) was disposed of, reflecting the Tribunal's adherence to the legal principles and procedural requirements outlined in the Insolvency and Bankruptcy Code, 2016.