2019 (9) TMI 891 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of company petition - Application is filed under Section 12 A of the Code - HELD THAT - It is clear from section 12A of the Code that the Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10 on an application filed by the applicant with the approval of 90% voting share of the Committee of Creditors. Thus it is clear if 90% voting share of Committee of Creditors approves application for withdrawal then Adjudicating Authority to allow for withdrawing the application filed under section 7 or section 9 or section 10 of the Code. The application for withdrawal under section 12A of the code shall be submitted to the IRP or RP as the case maybe in Form FA of the schedule before issue of invitation for expression of interest and further to be accompanied by a bank guarantee towards estimated cost. In this case EOI was issued on 03.05.2019 and the same was published. However on 04.05.2019 Financial Creditor filed withdrawal application in Form FA. The COC discussed the same. However, they approved the withdrawal by giving relaxation. Then Committee of Creditors to approve with 90% of voting share. If approved the IRP shall submit the application to the Adjudicating Authority on behalf of applicant and Adjudicating Authority may approve the same by order. We allow the settlement that has been entered into and annul the proceedings . Hon'ble Apex Court held Sec. prevails over regulation Sec 12A of I B Code provides for withdrawal. The COC with 100% voting share have approved the application for withdrawal. Therefore permission can be granted under Section 12A of the I B Code to the Application for withdrawal of Company petition. Application withdrawn.

Summary

Issues:
1. Application for withdrawal of company petition under section 12A of IBC.
2. Approval of withdrawal application by Committee of Creditors.
3. Interpretation of regulations regarding withdrawal of application.
4. Legal implications of allowing withdrawal post-publication of Expression of Interest (EOI).

Issue 1: Application for withdrawal of company petition under section 12A of IBC
The Interim Resolution Professional (IRP) filed an application seeking permission to withdraw the company petition CP(IB) NO. 315/7/HDB/2018 under section 12A of the Insolvency and Bankruptcy Code (IBC), along with Regulation 30A of the Insolvency and Bankruptcy Board of India Regulations, 2016. The IRP was appointed for the Corporate Debtor and constituted a committee of creditors in accordance with Section 21 of the IBC. The withdrawal application was filed by the Financial Creditor, Gowra Petrochem Private Limited, with no conditions attached except for the deviation of a Bank Guarantee towards estimated costs incurred for specific purposes.

Issue 2: Approval of withdrawal application by Committee of Creditors
The Committee of Creditors (COC) meetings were held, where the withdrawal application was discussed and approved. The COC unanimously (100%) approved the withdrawal application submitted by Gowra Petrochem Private Limited/Financial Creditor. The COC's approval was crucial as per the provisions of Section 12A of the IBC, requiring 90% voting share approval for withdrawal applications.

Issue 3: Interpretation of regulations regarding withdrawal of application
Regulation 30A of the I&B (Corporate Insolvency Resolution Process) Regulations, 2016, details the procedure for withdrawal of applications under section 12A of the IBC. The regulation mandates that the application for withdrawal must be submitted before the issuance of an invitation for Expression of Interest (EOI) and accompanied by a bank guarantee towards estimated costs. The Resolution Professional (RP) is responsible for submitting the application to the Adjudicating Authority upon approval by the COC with 90% voting share.

Issue 4: Legal implications of allowing withdrawal post-publication of EOI
The Tribunal considered the legal implications of allowing withdrawal after the publication of EOI. Referring to a previous decision, the Tribunal highlighted that Section 12A of the IBC prevails over regulations, allowing for withdrawal even after the issuance of an EOI. The Tribunal emphasized that the COC's unanimous approval for withdrawal, along with the absence of pending CIRP expenses, justified granting permission for withdrawal under Section 12A of the IBC. Consequently, the Tribunal approved the application for withdrawal, leading to the closure of the Corporate Insolvency Resolution Process (CIRP) for the concerned company petition.