9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (12) TMI 1247 - AT - IBCSeeking withdrawal of the Insolvency Petition u/s 12A of the IBC r/w Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - submission pressed by the Appellant is that the Resolution Professional has no jurisdiction to pray for withdrawal of the application. Whether the Resolution Professional had any jurisdiction or authority to file a purshish for withdrawal of the application? - HELD THAT - It was the Resolution Professional who has filed the application seeking withdrawal of the CIRP. The Hon ble Supreme Court had occasion to consider the entire statutory scheme for withdrawal of CIRP in recent judgment of GLAS Trust Company LLC 2024 (10) TMI 1185 - SUPREME COURT (LB) . The Hon ble Supreme Court has laid down that after admission of CIRP the CIRP process becomes in rem proceeding and it is the Resolution Professional who has to thereafter conduct the proceeding and after proceedings having become in rem they are no longer the preserve of only the applicant creditor and the corporate debtor and even creditors who were not the original applicants become necessary stakeholders - The Hon ble Supreme Court after noticing the entire statutory scheme in the IBC for withdrawal of the application held that the application for withdrawal has to be filed through the Resolution Professional. Thus it is the IRP/RP who is the person in control of the insolvency proceedings including the proceedings initiated by Resolution Professional for withdrawal under Section 12A - there are no lack of jurisdiction in the Resolution Professional filing purshish for withdrawal of Section 12A application. In the present case the MHIL has filed its claim in Form C on 11.06.2024 as submitted by Counsel appearing for MHIL which claim was kept on verification by the Resolution Professional for long period and could be admitted only on 16.09.2024 and prior to that date MHIL has to file an application seeking intervention as well as seeking a direction to accept the claim of MHIL - The withdrawal of the application under Section 12A is on account of subsequent event which has taken after 16.08.2024 i.e. admission of the claim of MHIL on 16.09.2024 i.e. much before the application filed under Section 12A could be heard or allowed. The Resolution Professional has rightly brought into the notice of the Adjudicating Authority on 17.09.2024 when application came for hearing that claim has been admitted and CoC has to be re- constituted. It is thus satisfied that the Resolution Professional had every jurisdiction to file purshish to withdraw of the application. In the facts of the present case Adjudicating Authority has permitted withdrawal of Section 12A application in accordance with law by order dated 12.11.2024. There are no error in the order dated 12.11.2024 passed by the Adjudicating Authority. The Appeal filed against the earlier order dated 15.10.2024 has become infructuous in view of the subsequent order dated 12.11.2024 - appeal dismissed.
Issues Involved:
1. Jurisdiction and authority of the Resolution Professional to withdraw the Section 12A application. 2. Admission and impact of the claim of Mitsubishi Heavy Industries Ltd. (MHIL) on the withdrawal process. 3. Compliance with the statutory scheme under Section 12A of the Insolvency and Bankruptcy Code (IBC) and Regulation 30A of the CIRP Regulations, 2016. 4. Validity of the Committee of Creditors' (CoC) decision prior to the inclusion of new creditors. Issue-wise Detailed Analysis: 1. Jurisdiction and Authority of the Resolution Professional: The primary contention raised by the appellant was regarding the jurisdiction and authority of the Resolution Professional (RP) to file a purshish for the withdrawal of the application under Section 12A of the IBC. The appellant argued that the RP acted beyond its authority since the withdrawal application should be filed by the original applicant, i.e., the Operational Creditor. The judgment clarified that according to the statutory scheme, once the Corporate Insolvency Resolution Process (CIRP) is initiated, it becomes a proceeding in rem, and the RP is the person in control of the insolvency proceedings. The Supreme Court's ruling in "GLAS Trust Company LLC v. BYJU Raveendran & Ors." was cited, emphasizing that the RP is responsible for conducting the proceedings, including filing for withdrawal under Section 12A. Thus, the tribunal found no lack of jurisdiction in the RP's actions. 2. Admission and Impact of MHIL's Claim: The admission of MHIL's claim as a Financial Creditor and its subsequent impact on the withdrawal process was a significant issue. MHIL's claim, which accounted for a 92.35% voting share in the CoC, was admitted after the initial CoC decision to approve the withdrawal. The tribunal noted that the RP delayed the verification and admission of MHIL's claim, which was only acknowledged on 16.09.2024. The tribunal emphasized that the CoC's decision for withdrawal on 16.08.2024 was made prior to MHIL's claim admission. Therefore, the tribunal ruled that the withdrawal could not proceed without considering MHIL's substantial interest, as the CoC needed to be reconstituted following the claim's admission. 3. Compliance with Section 12A and Regulation 30A: The tribunal scrutinized whether the procedures under Section 12A and Regulation 30A were followed. Section 12A requires withdrawal applications to be filed through the RP with the CoC's approval. Regulation 30A further outlines the process for withdrawal, emphasizing that the RP must submit the application on behalf of the applicant. The tribunal confirmed that the RP adhered to these procedures, and the withdrawal was processed in accordance with the law. The tribunal rejected the appellant's argument that the RP lacked authority, affirming that the RP acted within its jurisdiction by filing the withdrawal purshish. 4. Validity of CoC's Decision Prior to Inclusion of New Creditors: The appellant argued based on Regulation 12(3) that the inclusion of a new creditor should not affect the validity of prior CoC decisions. The tribunal acknowledged this regulation but clarified that the issue was not about the validity of the CoC's decision on 16.08.2024. Instead, the focus was on subsequent events, specifically the admission of MHIL's claim, which necessitated a reconstitution of the CoC. The tribunal concluded that the RP appropriately informed the Adjudicating Authority of these developments, and the withdrawal of the Section 12A application was justified. Conclusion: The tribunal upheld the Adjudicating Authority's decision to allow the withdrawal of the Section 12A application, finding no error in the process. The appeals challenging the orders dated 12.11.2024 and 15.10.2024 were dismissed, with the latter deemed infructuous due to the former's resolution.
|
