Application to Withdraw CIRP Dismissed for Procedural Non-Compliance The National Company Law Tribunal, Chennai, dismissed the application for withdrawal of the Corporate Insolvency Resolution Process under section 12A of ...
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Application to Withdraw CIRP Dismissed for Procedural Non-Compliance
The National Company Law Tribunal, Chennai, dismissed the application for withdrawal of the Corporate Insolvency Resolution Process under section 12A of the Insolvency and Bankruptcy Code, 2016. The Tribunal emphasized the importance of complying with procedural requirements outlined in the regulations, specifically noting that the application for withdrawal must be submitted before the invitation for expression of interest. The Resolution Professional's failure to adhere to these procedural rules led to the dismissal of the application.
Issues: Application for withdrawal under section 12A of the Insolvency and Bankruptcy Code, 2016.
In the judgment delivered by the National Company Law Tribunal, Chennai, the Resolution Professional filed an application seeking the withdrawal of the Corporate Insolvency Resolution Process (CIRP) under section 60(5)(a) of the IBC, 2016. The application was based on the settlement of all claims after the publication of expression of interest (EOI), contending that section 12A of the Code, along with regulation 30A and Form FA of the Insolvency and Bankruptcy Board of India Regulations, should not apply in this case. The Resolution Professional requested directions to the directors of the corporate debtor to defray the CIRP expenses and remove the corporate debtor from the IBC's jurisdiction.
However, the Tribunal noted that regulation 30A mandates that an application for withdrawal under section 12A must be submitted in Form FA before the issue of invitation for EOI under regulation 36A. The Bench emphasized that the conditional clause in regulation 30A regarding section 12A cannot be disregarded when considering an order under section 60(5) of the Code. As the Resolution Professional failed to comply with the procedural requirements outlined in the regulations, the Tribunal dismissed the application (M. A. No. 536 of 2018) as misconceived, highlighting the importance of adhering to the statutory provisions and procedural rules in insolvency proceedings.
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