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2019 (12) TMI 1576 - Tri - Insolvency and BankruptcyPermission for withdrawal of petition - recording of terms and conditions of settlement agreement - Constitution of CoC - HELD THAT - Mere plain reading of the provisions shows that Section 12A inserted by the amendment dated 06.06.2018 under which an application which was admitted under Section 7, 9 or 10 can be withdrawn and regulation 30A which has been amended recently provides how the withdrawal applications filed under Section 12A can be entertained by the Adjudicating Authority while considering the prayer of withdrawal of applications which has been admitted under Section 7, 9 or 10. Mere plain reading of the amended provision made in the regulations shows that there are two circumstances under which withdrawal is permissible. One is before the admission of the application under Section 7, 9 or 10 and before the constitution of COC and second one is after the admission of the application under Section 7, 9 or 10 and after the constitution of the COC and appointment of IRP. The present application herein is admitted on 01.11.2019 and IRP was appointed and the Operational Creditor was also directed to deposit of ₹ 2 lacs to meet the immediate expense of the IRP but here in the place of IRP the applicant directly filed the application under Rule 11 of the NCLT rules - the applicant has not filed the application under Section 12A read with Regulation 30A through TRP rather it is filed without following the procedure laid down in Section 12A of IBC, 2016 read with Regulation 30A of CIRP Regulations. So, in our opinion, the present application is not maintainable and liable to dismissed. Application dismissed.
Issues:
Withdrawal of application under Section 12A of IBC, 2016 and Regulation 30A of CIRP Regulations. Analysis: The judgment pertains to a CA filed by the Operational Creditor seeking withdrawal of the application under Rule 11 of the NCLT Rules, 2016. The Operational Creditor claimed to have settled the matter with the Corporate Debtor and requested permission to withdraw the case after recording the terms of settlement. The Operational Creditor argued that since a settlement had been reached, there was no need to involve the Insolvency Resolution Professional (IRP) or constitute the Committee of Creditors (COC) based on previous orders. The Tribunal examined the provisions of Section 12A and Regulation 30A, which govern the withdrawal of applications admitted under Section 7, 9, or 10 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal highlighted the specific procedures outlined for withdrawal applications before and after the constitution of the COC. The Tribunal noted that Section 12A allows for the withdrawal of applications admitted under Section 7, 9, or 10 of the IBC, while Regulation 30A specifies the process for such withdrawals. The judgment emphasized that withdrawals are permissible under two circumstances: before the admission of the application and before the constitution of the COC, or after admission and after the COC's constitution and the IRP's appointment. In this case, the application was admitted, the IRP was appointed, and the Operational Creditor was directed to deposit a specified amount. However, the Operational Creditor directly filed the application under Rule 11 without involving the IRP, contrary to the prescribed procedures under Section 12A and Regulation 30A. The Tribunal concluded that the Operational Creditor did not follow the mandated procedures for withdrawal under Section 12A and Regulation 30A. Despite citing previous decisions in support of their position, the Tribunal found that those cases differed from the present scenario. As the present application was not filed in accordance with the statutory provisions, the Tribunal deemed it not maintainable and dismissed the application accordingly. The judgment underscores the importance of adhering to the prescribed legal procedures for withdrawal applications under the IBC and CIRP Regulations to ensure compliance with the law and procedural fairness.
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