2022 (8) TMI 68 - Tri - Insolvency and Bankruptcy

Seeking withdrawal of application filed for initiation of CIRP - Section 12A of IBC, 2016 read with Regulation 30A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2019 - HELD THAT - The Hon'ble Supreme Court in KAMAL K. SINGH VERSUS DINESH GUPTA ANR. 2021 (10) TMI 479 - SC ORDER , it was held that the applicant/respondent no. 1 was justified in filing the application under Rule 11 of the NCLT Rules for withdrawal of the company petition on the ground that the matter has been settled between the parties. In view of the fact that the fees of the IRP has been paid in full, this instant Application stands allowed and, in the circumstances, IBA/606/2020 stands dismissed as withdrawn. Consequently, the CIRP initiated against the Corporate Debtor also stands withdrawn. The Corporate Debtor is released from the rigors of IBC, 2016 - Application allowed.

Issues involved:
1. Application under Section 12A of IBC, 2016 by IRP for Corporate Debtor.
2. Objections by Operational Creditors to the Application filed by IRP.
3. Consideration of stakeholders' interests in withdrawal applications.
4. Locus standi of objectors to object Application under Section 12A of IBC, 2016.
5. Application of relevant judgments in the matter.
6. Dismissal of Objectors' Applications with costs.
7. Discharge of IRP and withdrawal of CIRP against Corporate Debtor.

Analysis:
1. The judgment concerns an application (IA(IBC)/382(CHE)/2022) by the IRP for a Corporate Debtor under Section 12A of IBC, 2016. The IRP sought withdrawal of the CIRP initiated earlier. The IRP had been paid in full, and a Memorandum of Compromise had been settled between the Operational Creditor and Suspended Directors, leading to the application for withdrawal.

2. Two Operational Creditors filed objections (IA(IBC)/431(CHE)/2022 and IA(IBC)/432(CHE)/2022) to the IRP's application. These Operational Creditors had pending applications under Section 9 of IBC, 2016. The IRP mentioned an application for withdrawal of CIRP proceedings, prompting the Operational Creditors to file the present objections.

3. The judgment considered stakeholders' interests in withdrawal applications, citing the Supreme Court's stance on the matter. It highlighted the importance of considering all stakeholders before allowing or disallowing withdrawals, as seen in previous judgments like Swiss Ribbons Pvt. Ltd. and Anr. v. Union of India and Ors.

4. The Tribunal addressed the locus standi of objectors to object the Section 12A application, clarifying that objections could be raised post the application's approval. Objectors were advised to prosecute their pending applications under Section 9 of IBC, 2016 after the current application's approval.

5. The judgment extensively referred to legal precedents like the Swiss Ribbons case and the NCLAT judgment in Jai Krishnan Gupta v. Green Edge Buildtech LLP, emphasizing the need to follow established legal principles and judgments in such matters.

6. The Tribunal dismissed the Objectors' Applications (IA(IBC)/431(CHE)/2022 and IA(IBC)/432(CHE)/2022) due to their persistence despite legal guidance, imposing a cost of Rs. 25,000 payable to the Prime Minister National Relief Fund within 7 days.

7. Finally, the judgment allowed the IRP's application (IA(IBC)/382(CHE)/2022), leading to the discharge of the IRP, withdrawal of the CIRP against the Corporate Debtor, and handing over management to the Board of Directors. This action released the Corporate Debtor from the obligations under IBC, 2016, effectively concluding the matter.

The judgment provided a detailed analysis of the various issues involved, citing relevant legal principles and precedents to reach a comprehensive decision in the matter.

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