Supreme Court allows appeal, grants withdrawal of company petition, emphasizes CoC consultation.

The Supreme Court allowed the appeal, setting aside the NCLT's order and granting withdrawal of the company petition. The Court ruled in favor of the respondent, ordering the withdrawal of the petition without costs due to a settlement before the formation of the Committee of Creditors. The Court emphasized the importance of consulting the CoC before settling claims in collective proceedings, following the decision in Swiss Ribbons Private Limited and Anr. v. Union of India and Others.

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Issues:
1. Application for withdrawal of company petition and setting aside the initiation of Corporate Insolvency Resolution Process (CIRP) based on settlement before the constitution of Committee of Creditors (CoC).

Analysis:
The Supreme Court heard an appeal stemming from a judgment by the National Company Law Tribunal (NCLT) rejecting an application under Rule 11 of the NCLT Rules for withdrawal of a company petition filed under the Insolvency and Bankruptcy Code, 2016 (IBC). The respondent sought withdrawal based on a settlement with the corporate debtor before the formation of the Committee of Creditors (CoC). The Court noted that as per the decision in Swiss Ribbons Private Limited and Anr. v. Union of India and Others, a party can approach the NCLT directly before the CoC is constituted, and the Tribunal may allow or disallow withdrawal or settlement applications under Rule 11 of the NCLT Rules. The Court emphasized the importance of consulting the CoC before individual corporate debtors settle claims in collective proceedings.

The Court found that since the CoC had not been formed in the present case, the respondent was justified in filing the withdrawal application under Rule 11 of the NCLT Rules due to the settlement between the parties. Considering the facts and circumstances, the Court allowed the appeal, setting aside the NCLT's order and granting withdrawal of the company petition. The Court ruled in favor of the respondent, ordering the withdrawal of the petition and stating that no costs were to be incurred.

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