TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1011
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....essional (IRP) from proceeding with Corporate Insolvency Resolution Process (CIRP) of M/s Seya Industries Limited (hereinafter referred to as "Corporate Debtor"). The NCLAT, however, restrained the IRP from constituting a Committee of Creditors (CoC) till the next date of hearing. In the meanwhile, the Appellant and the Respondents were given the opportunity to settle their disputes before the Adjudicating Authority (NCLT) in terms of Section 12A of the IBC read with Rule 11 of the National Company Law Tribunal Rules, 2016 (NCLT Rules). The appeal was directed to be listed for hearing on 13th September 2021. 2. The Appellant is an erstwhile Director of Respondent No. 4, that is the Corporate Debtor. The Corporate Debtor, a company incorporated under the Companies Act, 1956 has been carrying on business, inter alia, of manufacture of benzene based Speciality Chemicals since 1990. It is stated that the Corporate Debtor had invested about Rs.400 Crores in its existing manufacturing facilities and had further invested about Rs.900 Crores in an integrated Greenfield Mega Project for Speciality Chemicals. 3. According to the Appellant, the Corporate Debtor is the source of livelihood f....
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....steeship issued a notice to the Corporate Debtor regarding nonpayment of interest amount of Rs.2,18,95,890.41/-. Beacon Trusteeship also issued an Enforcement Notice accelerating payment of the full investment amount i.e. Rs.77,94,92,513/- as due on 17th October 2019 on account of non-payment of Rs.2,18,95,890.41/- being interest coupon amount. 9. On 18th October 2019, the Respondent Nos. 1 to 3 invoked Clause 6.1 of the share pledge agreement and transferred 26.60 lakh shares worth Rs 91.78 Crores into the DEMAT Account(s) of the Respondents. 10. Between 18th-20th October 2019, the Corporate Debtor initiated Arbitration Proceedings before the High Court of Bombay. While the Arbitral Proceedings, to which the Respondent Nos. 1 to 3 had themselves agreed and consented to, were pending, they filed an application under Section 7 of the IBC before the National Company Law Tribunal (NCLT), Mumbai Bench. 11. On 15th January 2020, the Corporate Debtor filed its statement of claim seeking an award aggregating to Rs.848,75,30,000/- for losses and damages suffered by it. 12. On 26th February 2020, the Respondents filed statement of defence and counter claim seeking an award for payment o....
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....LAT stayed the formation of CoC, but declined to exercise its power under Rule 11 of the NCLAT Rules to take on record the settlement and dispose of the matter. Further, the NCLAT permitted the IRP to issue publication and also handover all assets and proceed with the CIRP even though the matter had been settled between the parties. Being dissatisfied by the order dated 18th August 2021 of the NCLAT, the Appellant has preferred the present Civil Appeal. 23. Section 12A of the IBC enables the Adjudicating Authority to allow the withdrawal of an application admitted under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of 90% voting shares of the Committee of Creditors in such a manner as may be specified. 24. Section 12A of the IBC clearly permits withdrawal of an application under Section 7 of the IBC that has been admitted on an application made by the applicant. The question of approval of the Committee of Creditors by the requisite percentage of votes, can only arise after the Committee of Creditors is constituted. Before the Committee of Creditors is constituted, there is, in our view, no bar to withdrawal by the applicant of an....
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....letion of the resolution process is not a reason to stifle the settlement. 31. Mr. Mukul Rohtagi, learned Senior Counsel appearing on behalf of the Appellant drew our attention to an order dated 25th August 2021, passed by a Bench of coordinate strength comprising S. Abdul Nazeer and Krishna Murari, J.J. in Civil Appeal No. 4993 of 2021, the relevant part whereof is extracted hereinbelow: "(3) We have heard learned counsel for the parties. It is not in dispute that CoC has not been constituted so far. This Court in Swiss Ribbons Private Limited and Anr. v. Union of India and others- (2019) 4 SCC 17 has held that at any stage, before a Committee of Creditors is constituted, a party can approach National Company Law Tribunal (NCLT) directly and that the Tribunal may, in exercise of its inherent powers under Rule 11 of NCLT Rules, allow or disallow an application for withdrawal or settlement. It was held thus: 82. It is clear that once the Code gets triggered by admission of a creditor's petition under Sections 7 to 9, the proceeding that is before the adjudicating authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary th....