Inherent power cannot bypass statutory insolvency withdrawal procedure when settlement is reached after admission of the petition.

A settlement reached after admission of an insolvency petition but before constitution of the committee of creditors may be considered by the appropriate forum in exercise of inherent power where no express remedy exists. However, where the Insolvency and Bankruptcy Code and its regulations specifically provide a withdrawal mechanism under Section 12-A and Regulation 30-A, the Appellate Tribunal cannot use Rule 11 to bypass that procedure. The application to take the settlement on record and set aside the impugned order was therefore held not maintainable before the Appellate Tribunal, and recourse had to be taken to the statutory withdrawal route.

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Issues: Whether the Appellate Tribunal could invoke its inherent power under Rule 11 to take the settlement on record and withdraw or set aside the insolvency proceedings instead of directing recourse to the statutory withdrawal mechanism under Section 12-A and Regulation 30-A.

Analysis: The settlement was reached after admission of the insolvency petition but before constitution of the committee of creditors. The settled law recognised that, before constitution of the committee of creditors, withdrawal or settlement may be considered by the appropriate forum in exercise of inherent power under the tribunal rules. However, the reasoning distinguished that position from a request made directly before the Appellate Tribunal when the statute and regulations already prescribe a specific procedure for withdrawal. Inherent power is available only where no express remedy exists and cannot be used to bypass the procedure fixed by the insolvency framework. Since Section 12-A and Regulation 30-A provide the route for withdrawal on settlement, there was no justification to invoke Rule 11 of the Appellate Tribunal Rules.

Conclusion: The application for taking the settlement on record and setting aside the impugned order was not maintainable before the Appellate Tribunal under Rule 11, and the appellant was required to follow the statutory withdrawal procedure.

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