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2021 (10) TMI 937 - Tri - Insolvency and BankruptcySeeking withdrawal of application filed under section 9 of IBC, 2016 by filing the FORM-FA which is not accepted - whether the constitution of the CoC by the IRP has been done in violation of the Orders passed by the this Tribunal and also by the Appellate Tribunal? - whether the Application filed under section 12A of IBC, 2016 is required to be allowed? - HELD THAT - The Corporate Debtor has averred in the Application that since the account of the Corporate Debtor was under the control of the IRP, they could not do any transactions and the amount was settled to the Operational Creditor only through the associate entity of the Corporate Debtor - it is significant to point out here that even though the Corporate Debtor has filed an Application under section 12A of IBC, 2016 before this Tribunal, the same was not accompanied with Form-FA and also there was some serious objections being raised by the Operational Creditor on the ground that the Corporate Debtor cannot directly file an Application under section 12A of IBC, 2016 and also on the ground that said Application has been filed by the Operational Creditor on 01.04.2021 without settling the amount which is due and payable by the Operational Creditor. This Tribunal is of the considered view that the Constitution of the CoC by the IRP on 12.04.2021 cannot be termed as 'illegal' or 'unconstitutional', since as 12.04.2021, there was no stay which was in operation. Hence, the constitution of the CoC by the IRP on 12.04.2021 does not suffer from any legal infirmities. It is required to be noted here that the Hon'ble NCLAT had given only 10 days time to file an Application under Section 12A of IBC, 2016 before the Adjudicating Authority and the Operational Creditor and the Corporate Debtor ought to have settled the matter within the stipulated time period. Since the CoC has been constituted by the IRP and the same is in vogue, the Application filed by both the Operational Creditor and the Corporate Debtor under Section 12A of IBC, 2016 without soliciting the requisite 90% approval from the CoC, is not maintainable. It is seen that the IRP has not violated any of the Order passed by this Tribunal or by Appellate Tribunal in constituting the CoC - Application dismissed.
Issues Involved:
1. Whether the constitution of the Committee of Creditors (CoC) by the Interim Resolution Professional (IRP) was in violation of the orders passed by the Tribunal and the Appellate Tribunal. 2. Whether the Application filed under Section 12A of the Insolvency and Bankruptcy Code (IBC), 2016 is maintainable. Detailed Analysis: Issue 1: Constitution of the Committee of Creditors (CoC) by the IRP - The Corporate Debtor filed IA/298/CHE/2021 under Section 12A of IBC, 2016 seeking withdrawal of the insolvency application. The Hon’ble NCLAT had granted the Corporate Debtor ten days to file the Section 12A application and stayed the constitution of the CoC if not already constituted. - The Corporate Debtor filed the application within the stipulated time. However, the IRP constituted the CoC on 12.04.2021, citing the expiration of the ten-day period. - The Operational Creditor objected, stating that the Corporate Debtor filed the application without settling the debt and without the required Form-FA. - The Tribunal noted that the CoC was constituted due to the uncertainty over the application and the non-settlement of the debt by the Corporate Debtor. The Corporate Debtor settled the debt only on 26.04.2021, after the CoC was constituted. - The Tribunal concluded that the constitution of the CoC on 12.04.2021 was not illegal or unconstitutional as there was no stay in operation on that date. Issue 2: Maintainability of the Application under Section 12A of IBC, 2016 - The Corporate Debtor’s application under Section 12A was not accompanied by Form-FA and faced objections from the Operational Creditor for being filed directly without settling the debt. - The Tribunal observed that the Hon’ble NCLAT had granted ten days for filing the Section 12A application, and the matter should have been settled within that time. - The Tribunal noted that since the CoC was constituted, any settlement proposal should have been placed before the CoC and required 90% approval from its members. - The Tribunal held that the application under Section 12A without the requisite approval from the CoC was not maintainable. The applications were deemed attempts to delay the CIRP process. Conclusion: - The Tribunal dismissed both IA/298/CHE/2021 and IA/601/CHE/2021, noting that the IRP had not violated any orders in constituting the CoC and that the Corporate Debtor’s settlement with the Operational Creditor occurred post-constitution of the CoC without following the mandated procedure under Section 12A of IBC, 2016.
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