2021 (5) TMI 644 - Tri - Insolvency and Bankruptcy

Application for withdrawal of CIRP initiated against Corporate Debtor - HELD THAT - The Application as filed by the Applicant/IRP as well as the sole Operational Creditor who had constituted the CoC had given its approval seeking withdrawal of the CIRP initiated by this Tribunal, based on the Application filed by the Operational Creditor/1st Respondent in Form 'FA' and also considering the Provisions of Section 12(A) and Regulations 30(A) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as well this Application in relation to seeking for withdrawal of the CIRP is allowed. Let the reins of the Corporate Debtor with the IRP be handed over to the Board of Directors, whose powers stood suspended by virtue of initiation of the CIRP as against the Corporate Debtor.

Summary

Issues: Application under Section 12(A) of IBC for withdrawal of Corporate Insolvency Resolution Process (CIRP) initiated against Corporate Debtor.

Analysis:
1. The Application was filed by the Insolvency Resolution Professional (IRP) seeking relief under Section 12(A) of the Insolvency & Bankruptcy Code, 2016 (IBC) along with Regulation 30(A) of the Insolvency Resolution Process for Corporate Persons Regulations, 2016. The IRP initiated the Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor by an order dated 28.06.2019.

2. The Application sought two reliefs: a) withdrawal of CIRP against the Corporate Debtor, and b) direction for payment of CIRP costs and Professional fees of the Interim Resolution Professional. The Application followed the necessary procedures, including public announcements for creditors' claims and compliance with relevant regulations.

3. The IRP received a claim only from the 1st Respondent, an Operational Creditor, while no Financial Creditor submitted a claim. As per the Regulations, the sole Operational Creditor with 100% voting rights constituted the Committee of Creditors (CoC). The CoC decided to withdraw the Application instead of appointing a Resolution Professional during the 1st CoC meeting.

4. The IRP also received a withdrawal Application in Form 'FA' from the sole member of the CoC, who was the Operational Creditor triggering the CIRP. The Application was supported by the Operational Creditor and the counter filed by the 1st Respondent confirmed the submission of Form 'FA' as per Regulations 30(A) of IBBI Regulations.

5. Regarding the fees claimed by the IRP, it was mentioned that a partial amount had been paid, and no further activities took place after the 1st CoC meeting. The relief sought for additional fees was not pressed, and the withdrawal of CIRP was primarily based on the approval of the Operational Creditor constituting the CoC.

6. The Tribunal allowed the Application for withdrawal of the CIRP based on Section 12(A) and Regulation 30(A) of IBBI Regulations. The management powers of the Corporate Debtor were directed to be handed over to the Board of Directors, and any assets or records collected during the CIRP process were to be transferred to the Management/Board of Directors as their powers were restored post the withdrawal order.