Tribunal Notices Government Agencies on CIRP Withdrawal Application: Absconding Promoters, OTS Proposal, Liquidation

The Tribunal issued notices to government agencies and authorities, including the Central Government, Enforcement Directorate, and CBI, regarding an application for withdrawal under Section 12A of the Insolvency and Bankruptcy Code, 2016. The application sought to withdraw the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, involving concerns about absconding promoters, legitimacy of an OTS proposal, and acceptance of funds from private investors. The CoC's evolving decisions led to the rejection of a resolution plan and liquidation resolution, with a subsequent approval for the withdrawal of CIRP.

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Issues involved:
1. Application for withdrawal under Section 12A of IBC, 2016.
2. Compliance with CIRP regulations for filing withdrawal application.
3. Acceptance of OTS offer and subsequent proceedings.
4. Voting results for withdrawal of CIRP and liquidation resolution.
5. Concerns regarding the absconding promoters and OTS proposal legitimacy.
6. Notice issuance to Central Government and other authorities for representations.

Analysis:
1. The application filed under Section 12A of the Insolvency and Bankruptcy Code, 2016 seeks permission to withdraw the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor. The provision allows withdrawal of applications admitted under Section 7, 9, or 10, subject to certain conditions.

2. The CIRP Regulation 30A outlines the procedure for filing a withdrawal application, including submission to the interim resolution professional or resolution professional in a specified form. The application must be accompanied by a bank guarantee for estimated costs incurred until the date of application. The committee's approval with ninety percent voting share is necessary for submission to the Adjudicating Authority.

3. The progress report indicates the acceptance of a revised offer for a one-time settlement (OTS) of financial debt by the Corporate Debtor's promoters. The Committee of Creditors (CoC) instructed the Resolution Professional to defer the publication of advertisement seeking resolution applicants. Subsequent proceedings involved voting on withdrawal of CIRP, approval of a resolution plan, and a resolution for liquidation.

4. The voting results revealed that the withdrawal of CIRP and the resolution plan submitted by a party were rejected by the CoC. This led to a resolution for liquidation, which was also rejected. A fresh resolution for withdrawal of CIRP received majority approval, highlighting the evolving decisions of the CoC.

5. Concerns were raised regarding the absconding promoters of the Corporate Debtor, the legitimacy of the OTS proposal, and the acceptance of funds from private investors. The application included details of the OTS proposal and the signatory, raising questions about authorization and legitimacy.

6. In light of the above issues, the Tribunal decided to issue notices to various government agencies and authorities, including the Central Government, Enforcement Directorate, CBI, and others. This step aimed to allow these entities to make representations before further orders were passed on the withdrawal application, ensuring transparency and compliance with legal procedures.

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