TaxTMI 
TaxTMI 
2024 (3) TMI 21
X X X X Extracts X X X X
X X X X Extracts X X X X
....re that Company Petition being No. 186 of 2015 was filed by the appellant before Madras High Court seeking winding up of Safire Machinery Company Private Limited (hereinafter called Corporate Debtor/ Respondent no.2) on account of inability of the respondent no.2 to make payment of Rs.118,751,000/- (including interest) for the goods supplied by the appellant to respondent no.2. After establishment of NCLT, the matter was transferred to the Adjudicating Authority and was numbered as TCP-141/(IB)/2017 to be treated as an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (hereinafter called IBC, 2016). 2.2 During the pendency of the petition before the Adjudicating Authority (AA) the settlement was agreed upon on 25.07.2017 and signed on 10.08.2017 between the appellant and the corporate debtor. Vide order dated 10.08.2017, the adjudicating authority disposed of the petition with liberty to the appellant to revive the petition in case there was default on the part of the corporate debtor to pay the amount under the settlement agreement. The corporate debtor defaulted in its obligation to pay and the Adjudicating Authority revived the petition on the basis of an appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ect to the property held by the corporate debtor in the registration district of South Chennai. 8. The main contention of the appellant is that as per the provisions of Section 12A of IBC, 2016, CIRP can be withdrawn only on the application of the applicant who had filed the application under Section 7, Section 9 or Section 10 of the 'Code'. The learned counsel of the appellant has also referred to Regulation 30A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 which also specifies that the application for withdrawal under Section 12A is to be made to the Adjudicating Authority by the applicant. The appellant has contended that it had never filed the application under Section 12A of IBC, 2016 read with Regulations 30A of IBBI (CIRP) Regulations and the Adjudicating Authority has erred in allowing withdrawal of CIRP. 9. For ready reference the provisions of Section 12A of IBC, 2016 and Regulation 30A of IBBI (CIRP) Regulations, 2016 are produced below:- "Section 12-A, The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under subregulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code.]] 10. The learned counsel for the appellant submits that the 'applicant' has been defined in Clause (a) of Sub-Regulation (1) of Regulation 2 of IBBI (CIRP) Regulations, 2016 as follows: "APPLICANT" means the person(s) filing an application under sections 7, 9 or 10, as the case may be; 11. It was submitted by the appellant that it had not signed Form 'FA' and the adjudicating authority has erred in accepting Form 'FA' which was not signed by the Applicant and has erred in allowing withdrawal of CIRP. It was submitted that the appellant had objected to the submission of Form 'FA', which was duly recorded in the minutes of the meeting of 5th CoC. The appellant relied upon the decision of NCLAT in the case of Francis John Kattukaran vs. The Federal Bank Limited & Anr., CA(AT) (Ins) No.242/2018 and Harish Raghavji Patel vs. Shapooriji Pallonji Fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....va Industries and Holding Limited in Civil Appeal No. 1811- 1812 of 2022 and stated that where the CoC has approved withdrawal of CIRP the Adjudicating Authority or NCLAT have limited powers and they cannot sit over the commercial wisdom of CoC. R2 and R3 have relied upon the decision of NCLAT, New Delhi in Mr. K. Srinvas Krishna VS. Shyam Arora in Company Appeal (AT) No. 221 of 2021 and Sukhbeer Singh Vs. Dinesh Chandra Agarwal in Company Appeal (AT) (Insolvency) No. 259 of 2019 in support of their claim that it is not essential that the applicant of the application under Section 9 should have signed Form 'FA'. 15. No reply/ written statement have been made by respondent no.4, i.e, Tamilnad Mercantile Bank. 16. We have gone through the submissions made by the appellant and the respondents and the judgments relied upon by them. After initiation of CIRP, the enabling provisions for withdrawal of CIRP are contained only in Section 12A of IBC, 2016. Section 12A is reproduced below for ready reference : - "Section 12A, The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inesh Chandra Agarwal cited supra was altogether different and CoC had not approved the proposal under Section 12A with 90% voting share and the appellant has submitted that the CoC should have examined the viability and feasibility of the resolution plan while considering Section 12A proposal, and this suggestion was rejected by the NCLAT. 20. We find that the proposal to file Form 'FA' and seek withdrawal of CIRP was considered as item no.5 in 5th CoC meeting held on 12.09.2022. Even in the said meeting Mr. Monish Surendran representing the operational creditor/ appellant (Joinup Corporation) had submitted his objection on signing of Form 'FA' and on the non-consideration of interest portion due to the appellant in the admitted claims. The minutes also recorded that the Form 'FA' was submitted by Tamilnad Mercantile Bank Limited. Thus, the respondents were well aware that the applicant of the application under Section 9 of IBC, 2016 was not willing to sign Form 'FA' and that Form 'FA' has been signed by the Financial Creditor (Tamilnad Mercantile Bank Limited). The impugned order in Para-6 has recorded as under, which is not factually correct, as Form 'FA' was not signed or subm....