2019 (6) TMI 1559 - Tri - Insolvency and Bankruptcy

Tribunal Withdraws CIRP Application under Section 9 IB Code, Emphasizing Collective Resolution

Khanna & Khanna Ltd. Versus Raj Rayon Industries Ltd. and Ors.

Khanna & Khanna Ltd. Versus Raj Rayon Industries Ltd. and Ors. - TMI Issues:Application for recalling order under section 9 of IB Code due to settlement between parties.Analysis:The judgment pertains to an application jointly filed by the Petitioner and Respondent to recall an order dated 29.05.2019 passed by the Bench in CP(IB) 26/2019 under section 9 of the IB Code, following a settlement between the parties. Initially, the application was admitted, and an IRP was appointed with directions under section 15 of the Code. Subsequently, the Corporate Debtor agreed to pay the outstanding amount along with interest, leading to consent terms being entered into on 19.06.2019. The IRP, upon notice of the application, mentioned expenses of approximately &8377; 8 lacs incurred but failed to provide supporting documents. Given the mutual settlement, the Tribunal referred to a judgment of the Hon'ble Supreme Court in Swiss Ribbons vs. Union of India, emphasizing the collective nature of proceedings under the Code and the necessity to consult the overseeing body before individual settlements. The Tribunal allowed the application for withdrawal based on this premise, recalling the CIRP and disposing of the main IB Petition as withdrawn.In line with the observations and conditions stated in the judgment, the Interlocutory Application No.362 of 2019 in CP(IB) No.26/9/NCLT/AHMD/2019 was deemed successful and allowed. Consequently, the CIRP concerning the Corporate Debtor of the mentioned case was recalled, and the primary IB Petition was disposed of as withdrawn. The Tribunal's decision was influenced by the principles highlighted in the Swiss Ribbons case, emphasizing the importance of the collective resolution process and the need for consultation before individual settlements in insolvency proceedings.