2022 (3) TMI 990 - Tri - Insolvency and Bankruptcy

Tribunal approves withdrawal of insolvency petition under Section 9

The Tribunal approved the withdrawal of the insolvency petition under Section 9 of the Insolvency and Bankruptcy Code. The Committee of Creditors, with ... Seeking withdrawal of CIRP application - Section 12A of the Insolvency and Bankruptcy Code, 2016 read with Regulation 30A(1)(b) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- In view of the Resolution passed by the CoC in the 1st CoC Meeting dated 11th February 2022 and filing of Form-FA by the Interim Resolution Professional seeking withdrawal of CP(IB)/34/KOB/2021 with 100% voting right, nothing further to be decided in the matter. Since nothing has been stated by the IRP regarding the payment received by him, it is presumed that he has received the fee and expenses from the CoC. The Corporate Debtor is relieved from the rigors of CIRP and consequently the IRP is discharged of his duties. The Powers of the Board of Directors stand restored and the Company is directed to operate under the management of its Board of Directors - Application allowed. Issues:Application for withdrawal of insolvency petition admitted under Section 9 of the Insolvency and Bankruptcy Code based on Form-FA filed by the Operational Creditor under Section 12A of the Code.Analysis:The Interim Resolution Professional (IRP) filed an Interlocutory Application seeking withdrawal of the insolvency petition admitted under Section 9 of the Insolvency and Bankruptcy Code. The IRP requested an order for withdrawal based on the Form-FA filed by the Operational Creditor under Section 12A of the Code. The Tribunal admitted the initial application by the Operational Creditor against the Corporate Debtor and appointed the IRP. The IRP invited claims from stakeholders through newspaper publications and received claims from two creditors. The Committee of Creditors was constituted, and a meeting was convened to discuss the withdrawal of the application. The suspended directors of the Corporate Debtor submitted Form-FA for withdrawal along with consent terms, outlining the settlement agreement.The settlement terms included fixing the due amount, partial payments made by the Corporate Debtor, and a monthly payment plan until the total amount was cleared. The Committee of Creditors noted that the Corporate Debtor was a going concern engaged in solar power projects, with only two claims received. The sole member, Punjab National Bank, and the Operational Creditor had settled their claims. Punjab National Bank agreed to the withdrawal proposal, with the right to legal action in case of default. The Operational Creditor agreed to cover expenses and fees until withdrawal approval. The Committee, with 100% voting rights, approved the withdrawal of the application.After hearing the counsel for the IRP and the Operational Creditor, the Tribunal reviewed the resolution passed by the Committee of Creditors. The resolution approved the withdrawal of the application, subject to certain conditions, including the right to initiate fresh proceedings in case of default. The IRP was directed to bear expenses until disposal, and the Committee was not liable for CIRP proceedings expenses. With the resolution passed and Form-FA filed by the IRP for withdrawal, the Tribunal found no further action required. The Corporate Debtor was relieved from the insolvency process, the IRP discharged from duties, and the Board of Directors' powers restored for the Company to operate under their management.In conclusion, the Tribunal allowed the Interlocutory Application for withdrawal of the insolvency petition, providing relief to the Corporate Debtor and discharging the IRP from duties, directing the Company to operate under the Board of Directors' management.