Tribunal Revives IB No. 08/ND/2019, Terminates CIR Proceedings

The Tribunal allowed the revival of IB No. 08/ND/2019 under Section 12A of the Insolvency and Bankruptcy Code, terminating the CIR proceedings against the Corporate Debtor due to a settlement in a related matter. Despite the settlement, the applicant was permitted to file a claim before the IRP initially. The Tribunal emphasized returning the matter to its original position and granted the petitioner the opportunity to file a rejoinder within seven days. The case is scheduled for the filing of rejoinder and arguments on 21.04.2022.

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Issues:
Revival of CP(IB)-098 of 2019 under Rule 11 of NCLT Rules, 2016 for an Operational Creditor.

Analysis:
The application filed sought revival of CP(IB)-098 of 2019 under Rule 11 of NCLT Rules, 2016 by M/s. Arihant Trading Company on behalf of the Operational Creditor. The matter originated from IB-08 of 2019 under section 9 of the Insolvency and Bankruptcy Code, 2016, where CIRP was sought against the respondent. The proceedings were extensively argued, and an order was reserved on 14.01.2021. Another related matter, C.P.(IB)-2992/ND/2019, against the same Corporate Debtor was also pending and reserved on the same date. The Tribunal admitted the latter matter and directed the applicant to file its claim before the IRP. Subsequently, the applicant filed its claim as directed.

The applicant later discovered that IB-08 of 2019 had been settled between the parties, leading to the withdrawal of CIRP against the Corporate Debtor. This left the applicant with no recourse for its claim. Despite the settlement, the applicant was initially permitted to file a claim before the IRP, as per the Tribunal's order. However, with the withdrawal of CIRP proceedings, the applicant sought revival under Section 12A of the IB Code, which was allowed, terminating the CIR proceedings against the Corporate Debtor due to the settlement.

The Tribunal acknowledged the applicant's right to revive IB No. 08/ND/2019, emphasizing the need to return the matter to its original position. Despite the increased threshold limit under a notification, the Tribunal deemed the revival of the petition necessary, considering the circumstances and the applicant's entitlement. The Tribunal highlighted that the petition was not withdrawn due to a settlement but was disposed of after the initiation of CIR proceedings in another matter, emphasizing the need for revival post the withdrawal of CIRP proceedings under Section 12A of the Code.

Consequently, the Tribunal ordered the revival of IB No. 08/ND/2019 to its original number, granting the petitioner an opportunity to file a rejoinder within seven days. The matter was scheduled for filing of rejoinder and arguments on 21.04.2022.

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