2019 (8) TMI 1037 - Tri - Insolvency and Bankruptcy

Withdrawal of the Corporate Insolvency Resolution Process - Section 12A of the Insolvency and Bankruptcy Code r.w 30(a) - the Petitioner Bank was able to make E-auction of the assets(property) of the company and full satisfaction of its debts realised - HELD THAT - This Adjudicating Authority in exercise of its powers conferred under Section 12A of the Insolvency and Bankruptcy Code allow the present application for recording settlement and recalls the Corporate Insolvency Resolution Process but with such observation so as to safeguard adequate the interest of third party stakeholders that the present order shall not prejudice or affect right of others creditors, stakeholders as the case may be and they shall be at liberty to agitate their right and claim before appropriate forum including this Court in accordance with the law. - order dated 31.05.2019 recalled. Application allowed.

Summary

Issues:
1. Settlement approval by the Committee of Creditors under Section 12A of the Insolvency and Bankruptcy Code.
2. Withdrawal of Corporate Insolvency Resolution Process.
3. Safeguarding the interests of third-party stakeholders.
4. Payment of Corporate Insolvency Resolution Process costs and fees.

Analysis:
1. The judgment revolves around the approval of a settlement proposal by the Committee of Creditors (CoC) under Section 12A of the Insolvency and Bankruptcy Code. The Petitioner, a bank, settled with the Corporate Debtor, realizing an amount towards full satisfaction of its debts through an E-auction of the company's assets. The CoC, consisting solely of the Petitioner bank, approved the settlement proposal with 100% voting, leading to the withdrawal of the Corporate Insolvency Resolution Process.

2. The Adjudicating Authority allowed the application for recording the settlement and recalled the Corporate Insolvency Resolution Process. The order emphasized safeguarding the interests of third-party stakeholders, ensuring that the withdrawal does not prejudice or affect the rights of other creditors or stakeholders. They are granted the liberty to assert their rights and claims before the appropriate forum, including the Court, in accordance with the law.

3. Addressing the financial aspect, the judgment noted that the costs and professional fees of the Corporate Insolvency Resolution Process had been paid to the Resolution Professional. The order allowed the application and disposed of the matter related to the Corporate Insolvency Resolution Process commenced earlier, recalling the previous order.

4. Additionally, the judgment directed the communication of the order to the Regional Director, Ahmedabad, and the concerned Registrar of Companies for necessary action. The detailed account of the actions taken by the Resolution Professional and the approval process by the CoC provided a comprehensive background leading to the decision to withdraw the Corporate Insolvency Resolution Process based on the settlement reached between the Petitioner bank and the Corporate Debtor.