Tribunal allows withdrawal of petition post-admission under NCLT Rule 11, emphasizing parties' settlement power.

The Tribunal allowed the withdrawal of a petition under Rule 11 of NCLT, 2016, even after admission, following a joint memo of compromise between the parties. Citing the Supreme Court's decision in Swiss Ribbons Pvt. Ltd. & anr. v. Union of India & ors., the Tribunal exercised its discretion to permit withdrawal. The Corporate Debtor was instructed to reimburse the IRP's expenses and return any assets taken into custody. The Board of Directors' suspended powers were reinstated upon allowing the withdrawal. This case underscores the Tribunal's authority to allow withdrawal post-admission and the significance of parties reaching settlements in insolvency matters.

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Issues involved:
Withdrawal of petition after admission by the Tribunal under Rule 11 of NCLT, 2016.

Analysis:
The Tribunal was informed that the Petition was admitted on 21.02.2020, but the order of admission had not been uploaded or copies furnished. Both parties reached a settlement in terms of a joint memo of compromise. The Counsel for the Petitioner cited the Supreme Court's order in the matter of Swiss Ribbons Pvt. Ltd. & anr. versus Union of India & ors., stating that the Tribunal has inherent powers to allow parties to withdraw a Petition even after admission. Considering the Application and joint memo of compromise, the Tribunal decided to allow the withdrawal under Rule 11 of NCLT, 2016. The Corporate Debtor was directed to reimburse any expenditure incurred by the IRP and return any assets taken into custody. The powers of the Board of Directors, which were suspended, were restored as the Application was allowed.

This judgment highlights the Tribunal's discretion to allow withdrawal of a Petition even after admission, as per Rule 11 of NCLT, 2016. The reference to the Supreme Court's order in the Swiss Ribbons case emphasizes the Tribunal's inherent powers in such situations. The importance of parties reaching a settlement through a joint memo of compromise is evident in this case, leading to the withdrawal of the Petition. The directive for the Corporate Debtor to reimburse any expenses incurred by the IRP shows the Tribunal's attention to financial matters even in cases of withdrawal. Additionally, the restoration of the Board of Directors' powers signifies the practical implications of allowing such withdrawals and settlements in insolvency proceedings.

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