2020 (6) TMI 746 - AT - Insolvency and Bankruptcy

Permission for withdrawal of appeal - Constitution of Committee of Creditors - legally permissible exit route for the Corporate Debtor to come out from the rigour of corporate insolvency resolution process - HELD THAT - Appeal disposed off giving liberty to the Corporate Debtor to approach the Committee of Creditors through Interim Resolution Professional for permitting the Operational Creditor to withdraw the application in view of settlement stated to have been arrived at, inter-se, the Operational Creditor and the Corporate Debtor .

Summary

Issues involved:
Constitution of Committee of Creditors, Exit route for Corporate Debtor, Mechanism under Section 12A of the Insolvency and Bankruptcy Code, 2016

Constitution of Committee of Creditors:
The judgment addresses the issue of the constitution of the Committee of Creditors, highlighting that the Operational Creditor is the sole creditor and the Committee of Creditors comprises only of him. It is noted that since no other claimant exists, the only legally permissible exit route for the Corporate Debtor from the corporate insolvency resolution process is through the mechanism under Section 12A of the Insolvency and Bankruptcy Code, 2016.

Exit route for Corporate Debtor:
The judgment emphasizes that the Corporate Debtor can come out of the corporate insolvency resolution process by taking recourse to the mechanism under Section 12A of the Insolvency and Bankruptcy Code, 2016. It is mentioned that the Corporate Debtor is given liberty to approach the Committee of Creditors through the Interim Resolution Professional for permitting the Operational Creditor to withdraw the application due to a settlement between the Operational Creditor and the Corporate Debtor.

Mechanism under Section 12A of the Insolvency and Bankruptcy Code, 2016:
The judgment concludes by disposing of the appeal and allowing the Corporate Debtor to approach the Committee of Creditors through the Interim Resolution Professional for withdrawal of the application based on the settlement between the Operational Creditor and the Corporate Debtor. The interim directions are vacated, and a copy of the order is directed to be sent to the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench for information.