AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 9
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....e contribution of the land by the Appellant, he would be entitled to 45% share in the Project profits. During the implementation of the Project, M/s. Reliance Value Services Pvt. Ltd., being the Financial Creditor, filed an Application under Section 7 of I & B Code, 2016, for initiation of CIRP against M/s. Vees Properties Ltd. The said Section 7 Application was registered as CP(IB)/127(CHE)/2025, before the Ld. NCLT on 07.05.2025, and it was admitted on 03.09.2025 thereby commencing CIRP of Corporate Debtor. Subsequent to commencement of CIRP, an application was filed by IRP of M/s. Vees Properties Limited, that being IA(IBC)/1557(CHE)/2025 in CP(IB)/127/2025, under Section 12A of the I & B Code read with Regulation 30A of IBBI (IRP for Corporate Persons) Regulation, 2016, and Rule 11 of NCLT Rules, 2016. 2. The relief sought by the IRP in the said Application IA(IBC)/1557(CHE)/2025 was to withdraw the CIRP. This application was allowed by Ld. NCLT vide order dated 04.11.2025. 3. It is this order, which is under challenge by the Appellant on the ground that, since, he had entered into a Joint Development Agreement with the Corporate Debtor dated 23.11.2007, and had 45% share....
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....A of the I & B Code, 2016, for withdrawing of the Company Petition, after the Corporate Debtor has already been directed to be admitted to the CIRP process, by the order of 03.09.2025, would be bad and Section 7 Application ought not have been permitted to be withdrawn owing to the fact that, upon invitation of claim as made by the RP by publications in the local newspapers, the Appellant had already submitted his claim in Form C to the tune of Rs. 50 Crore based on the Joint Development Agreement before the cut-off date of 17.09.2025, and his claim has been classified under the category of the ``other Creditors'' and listed at Serial No. 3 in the list of Creditors, given in the Schedule of Claim which has been filed before the Ld. Tribunal, and therefore, he should have been heard and his consent should have been taken prior to filing of the application under Section 12A of I & B Code, 2016. 8. He has further stated that, on 22.09.2025, the Respondent No. 2 / Financial Creditor had filed Form FA for withdrawal of the Company Petition being CP(IB)/127(CHE)/2025 on the basis of the Settlement Agreement dated 23.09.2025, that was executed between the Respondent No. 2, Respondent N....
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....nt Agreement dated 23.09.2025, has been entered into between M/s. Reliance Value Services Pvt. Ltd. called as the First Party (or) the Financial Creditor M/s. Vees Properties Limited (erstwhile KGS Developers Limited), called the Second Party (or) the Corporate Debtor, and 6 Equity Shareholders collectively holding 100% equity shares of M/s. Vees Properties Limited (Corporate Debtor). 14. As per the terms of the Settlement Agreement dated 23.09.2025, the settlement amount of Rs. 48,48,19,180/- was agreed to be paid by the Corporate Debtor out of which Rs. 3 Crore to be paid on execution of the Agreement and the balance by way of post dated cheques as detailed in the impugned order and consequent to the said terms, the Financial Creditor had agreed for the withdrawal of the CIRP process, as it stood initiated at their behest under Section 7 of the I & B Code, 2016. However, the rights of the Financial Creditors were kept reserved, in the sense that, if any of the conditions was not complied with by the Corporate Debtor or there is any material breach of the terms of the settlement, it will be open for the Financial Creditor to revive and pursue the insolvency proceedings, for the....
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....law, NCLT can consider withdrawal of CIRP Application, before formation of CoC, after hearing all the concerned parties. iv) No objections have been received from the other parties for withdrawal. v) In the FA submitted by the financial creditor, it is stated that CIRP cost and IRP fees have been paid in accordance with the regulations." 17. Based on the analysis as above and recording that as the CoC is yet to be constituted and therefore, NCLT can consider withdrawal of Section 7 Application, after hearing all concerned parties, that no objections have been received and CIRP Cost and IRP Fees have been paid in accordance with the Regulations, Ld. Tribunal proceeded to pass the impugned order, allowing withdrawal of Section 7 Application by the Financial Creditor (FC). 18. Section 12A of IBC, 2016, to be read with Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, lays down the procedure for withdrawal of the application filed under Section 7 of the Code. This has been further elaborated by Hon'ble Apex Court in Glas Trust v. Byju (supra). It states that withdrawal of the said application can be sought at four dif....
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....Rule 11 of 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." 20. It is seen that, after considering the Judgment said entirety of the controversy and while invoking its inherent powers under Rule 11 of NCLT Rules, 2016, as prescribed by the Judgment of Glas Trust Company LLC (supra), which is to be read in consonance to the other authorities rendered by the Hon'ble Apex Court, the Ld. Tribunal had proceeded to allow the withdrawal of CIRP process. 21. In the proceedings of the Company Petition, in which CIRP was commenced against the Corporate Debtor, the Appellant was only an entity, who had filed his claim and his claim was not yet admitted, when application for withdrawal of Section 7 Application was filed. At this stage, mere filing of his claim will not crystallize his rights to take part in the proceedings in which Section 12 Application was taken up, as his claim was yet to be adjudicated when the proceedings of the Company Petition was taken on merits. Further, since the Ld. Tribunal in itself has satisfied itself....