TaxTMI 
TaxTMI 
2019 (12) TMI 431
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....Delhi, Court III) in IB-179/ND/2019. 2. In nutshell, Respondent No.1 - Green Edge Buildtech Llp filed Application under Section 9 (Page - 29) against the Respondent No.2 - Corporate Debtor. The record shows that the Application was dated 15^th January, 2019. The Application came to be admitted on 11.07.2019 (Page - 205). According to the Appellant, the Operational Creditor and Corporate Debtor entered into settlement of the dispute as per document dated 26.07.2019 (Page - 214) and post-dated cheques were issued (Page - 223). As per the record, there is Application dated 13.07.2019 (Page - 224) which was filed for withdrawal of the insolvency proceedings which Application was moved by Nitin Jain on behalf of the Operational Creditor. Section 9 Application also had been filed for Operational Creditor through Nitin Jain (Page - 29). The Counsel for the Appellant submitted that this Application CA 509/2019 (Annexure A-7) was filed on 30.07.2019. Appellant claims that after such Application was filed, the IRP - Mr. Prabhat Ranjan Singh also filed Form FA (Page - 255) which is dated 7th August, 2019 before the Adjudicating Authority in which the settlement dated 26.07.2019 was e....
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....he second Impugned Order came to be passed which is as follows:- "ORDER Learned Counsels for the parties are present. It is seen that the matter has been dealt with vide Order dated 09.08.2019. Application in CA No.509/CIII/ ND/2019 has been filed under Rule 11 of the NCLT Rules, 2016 seeking termination of CP No.IB- 179/ND/19 in view of the settlement between the parties. Ld. IRP is present in person and represents claims have been received from the Financial Creditor as well as all other Operational Creditors and in the meantime, COC has also been constituted and in the circumstances, let this settlement which has prompted this Application be placed before the COC for its consideration. Ld. IRP to report to COC in relation to the settlement and place it before it in the meeting to be convened by the IRP in this regard." Thus, the Adjudicating Authority referred the matter to COC with regard to settlement and asked the IRP to place the settlement before the COC. 6. Against such developments in the proceedings, present Appeal has been filed by the Appellant for the Corporate Debtor raising grounds that the Adjudicating Authority wrongly observed in the Se....
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....rector of the Corporate Debtor - Mr. Jai Kishan Gupta kept misguiding and misrepresenting to the IRP even regarding the location of the office of Corporate Debtor and bogus and non-existent addresses were shown. The Resolution Professional has pointed out that Bank Statements taken out show that huge cash withdrawals (Rs. 25 Lakhs in single transaction) and further various cash transactions running into lakhs have been made by the Suspended Directors and money has been diverted and with such object, the books and records were not being provided to IRP or the Resolution Professional and that huge amounts have been siphoned off/diverted for which the Adjudicating Authority has been moved. The Counsel for the Respondent No.2 through IRP pointed out particulars from the first meeting of COC (Copy of which is at Reply Page 19 @ Page 23). Respondent No.2 has further pointed out that in the first COC meeting, COC considered the Second Order dated 22nd August, 2019 passed by the Adjudicating Authority and COC disapproved the withdrawal of the CIRP proceedings and decided to proceed. 9. The learned Counsel for the Appellant has relied on Judgements in the matters of "Amit Katyal Vs. Manj....
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.... resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a Committee of Creditors is constituted (as per the timelines that are specified, a Committee of Creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the Committee of Creditors is not yet constituted, a party can approach NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the parties concerned and considering all relevant factors on the facts of each case." The Regulation 30A referred to in para - 81 of the Judgement of Swiss Ribbons appears to have been amended after the above Judgement dated 25th January, 2019. The amendment brought in the Regulations with effect from 25.07.2019 by way of substitution is as under:- "[30 A. Withdrawal of application (1) An application for withdrawal under section 12A may be made to the Adjudicating Author....
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.... debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code.]" 12. In the present matter, Form FA dated 7th August, 2019 appears to have been filed by the IRP (Page - 255). Hon'ble Supreme Court has in para - 82 of the Judgement clearly provided that at any stage where the COC is yet not constituted, a party can approach NCLT (National Company Law Tribunal) "directly". As such, in exercise of its inherent powers under Rule 11 of NCLT Rules, 2016, Adjudicating Authority could allow or disallow an Application for withdrawal or settlement even when filed by Applicant directly when COC was yet not constituted. Although Regulation 30-A as subsequently amended, provides that even before the constitution of COC, the Applicant would require to approach Adjudicating Authority through IRP, we would not have found fault with the Operational Creditor directly approaching for withdrawal before COC was constituted as was done in the present matter on 13.07.2019 when Nitin Jain for the Operational Creditor applied for withdrawal. 13. The question, however, remains that th....