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2026 (5) TMI 1675
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.... by the impugned order allowed the I.A. filed by the Interim Resolution Professional ("IRP") and dismissed as withdrawn the Section 9 application filed by the operational creditor. Aggrieved by the order, these two appeals have been filed. 2. Brief facts of the case necessary to be noticed for deciding these two appeals are: i. The West Bengal Agro Textile Corporation Limited, the corporate debtor 100% Government of West Bengal owned entity used to take supplies from vendors. An application under Section 9 was filed against the corporate debtor by operational creditor Jitendra Jain, on which C.P. (IB) No.207/KB/2023 was registered. Application was filed alleging default of non-payment of invoices claiming an amount of Rs. 1,19,36,635/-. ii. Appellant also claimed to have filed Section 9 application C.P. (IB) No.2347/KB/2024, 'Chandra Prakash Lohia' Vs. 'M/s. West Bengal Agro Textile Corporation Ltd.' and C.P. (IB) No. 353/KB/2024, 'Basanti Devi Lohia' Vs. 'M/s. West Bengal Agro Textile Corporation Ltd.' iii. In Section 9 application filed by Jitendra Jain, an order was passed by the adjudicating authority on 22.08.2025 admitting Section 9 application a....
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....] and another judgment of this Tribunal in 'Chikali Nagaraju, (Suspended Director of Balasore Alloys Ltd.)' Vs. 'MSTC Ltd. (Government of India Enterprise) & Anr.' in [Comp. App. (AT) (Ins.) No. 878/2025] decided on 25.08.2025. It is submitted that without hearing the appellant, the adjudicating authority committed error in allowing the 12A application. 5. Learned counsel appearing for the corporate debtor submits that the present is the case where Settlement Agreement dated 18.08.2025 had already been entered between the parties and immediately after admission of Section 9 application on 22.08.2025, operational creditor has given Form-FA to the IRP to withdraw the Section 9 application. The application was filed by the IRP dated 25.08.2025 which has been rightly allowed by the adjudicating authority on 27.08.2025. It is submitted that IRP did not issue any publication nor has constituted the Committee of Creditors ("CoC"), hence the application was filed by the IRP as per Regulation 30A of the CIRP Regulations, 2016, which is a procedure prescribed. Adjudicating authority rightly allowed the 12A application. Appellant or no other person filed any objection nor appeared before t....
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.... to deposit a sum of Rs. 2,00,000/- with the applicant to meet the expenses arising out of issuing public notice and inviting claims. A copy of the order dated 22nd August, 2025, is annexed hereto and marked with the Letter- "A". 2. The Applicant states that he has not received any communication from the Registry of the National Company Law Tribunal. Kolkata Bench, regarding the order initiating the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The Applicant became aware of the said order only upon receiving an electronic mail from the Operational Creditor, informing him about the withdrawal of the application that had been admitted for CIRP against the Corporate Debtor. 3. On 23rd August, 2025, the applicant has received an electronic mail from the operational creditor along with a copy of Form FA under Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016, seeking to withdraw the application bearing case number C.P. (IB) No. 207/KB/2023 which was filed by the operational creditor before this Hon'ble Tribunal under Section 9 of the Insolvency and Bankru....
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....tions 30(A) & 30(A)(1) to 30(A)(4) are as follows: "30A. Withdrawal of application.- (1) An application for withdrawal under section 12A may be made to the Adjudicating Authority - (a) before the constitution of the committee, by the applicant through the interim resolution professional; (b) after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be: Provided that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation. (2) The application under sub-regulation (1) shall be made in Form FA of the 3[Schedule-I] accompanied by a bank guarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub-regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of ....
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....e background of facts, the appeals were filed. Hon'ble Supreme Court in the above context had occasion to consider the law pertaining to withdrawal of CIRP. Hon'ble Supreme Court has noted the provisions of 12A read with Regulation 30A of the CIRP Regulations, 2016 and in paragraph 63 has noted the four scenes where application under withdrawal has to be considered. Paragraph 63 of the judgment is as follows: "63. In essence, after a series of deliberations by the legislature, the executive and nudges by this Court, the framework created by Rule 8 of the NCLT Rules and Section 12-A IBC read with Rule 30-A of the CIRP Regulations lays down an exhaustive procedure for the withdrawal of an application filed by creditors under Sections 7, 9, or 10 IBC. Withdrawal may be sought at four stages, all of which have a procedure prescribed under the existing framework. These may be summarised as follows: 63.1. Before the application under Sections 7, 9 or 10 is admitted by NCLT : Such cases are squarely covered by Rule 8 of the NCLT Rules, which requires that the applicant approach NCLT directly. NCLT may then pass an order permitting the withdrawal of the application. At th....
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....me Court has noted the facts of the case in 'GLAS Trust Company LLC' (supra), where CoC was not constituted. Hon'ble Supreme Court noticed that in the case none of the requirements as provided in Regulation 30A was present. In paragraph 79, following was held by the Hon'ble Supreme Court: "79. In such cases, the legal framework mandates that: (i) an application for withdrawal be moved; (ii) the application has to be moved through the IRP; and (iii) it be placed before NCLT for approval. None of these requirements were met in the present case. First and foremost, there was no formal application instituted to seek the withdrawal of CIRP. The settlement agreement was taken on record and approved by Nclat based on the submissions and assurances of the counsel before it and the affidavits/undertakings filed by the parties. Further, the first respondent, who is a former Director of the corporate debtor, did not move the application through the IRP and instead approached Nclat directly. Finally, the request to approve the settlement was moved before Nclat during the appellate proceedings, instead of being placed before NCLT. Despite these grave....
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....withdrawal of the Company Petition. ix. The Appellant, Himanshu Singh, Suspended Director of the corporate debtor also filed a Comp. App. (AT) (Ins.) No. 708/2022 challenging the order initiating CIRP against the corporate debtor, which appeal was disposed of on 29.06.2022 accepting the request of the counsel for the appellant for withdrawal of the Company Appeal. This Tribunal also noticed that Section 12-A application has already been filed by the IRP. Appellate Tribunal directed that till the disposal of the I.A. under Section 12A, the implementation of the impugned order shall remain stayed. x. On 30.06.2022, HDFC Bank, another financial creditor of the corporate debtor submitted a claim of Rs. 4,30,74,985/- to the IRP. HDFC's claim was not being collated by the IRP, in view of the Order dated 29.06.2022 passed by this Tribunal, HDFC Bank filed an I.A. 200/2022 before the Adjudicating Authority praying for permitting intervention of the applicant. xi. It was further prayed that the application filed by the IRP for withdrawal of the CIRP be rejected. Both the applications i.e., I.A. No. 200/2022 & I.A. No. 182/2022 were heard by the Adjudicating Author....
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....nder 12A be allowed or rejected." The above judgment does not help the appellant in the facts of the present case. 17. Present is not a case that any objection was filed before the adjudicating authority including by the appellant. In 'Himanshu Singh' (supra), the HDFC Bank was objecting to the settlement since it has already filed the claim whose claim was not being verified by the RP. The above judgment is clearly distinguishable and does not help the appellant. 18. Another judgment relied by the appellant is 'Chikali Nagaraju, (Suspended Director of Balasore Alloys Ltd.)' (supra), which was a case where appeal was filed by the suspended director challenging the order dated 12.06.2025 by which Section 9 application was admitted. Suspended director pleaded in the appeal that during pendency of the application, corporate debtor paid the principal amount to the operational creditor and before any settlement, matter could have been finally settled, the application was admitted. The above facts have been noted in paragraph 3 of the judgment, which is as follows: "3. During the pendency of the application i.e. CP (IB) No. 36/CB/2022, the CD paid the principal amount t....
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.... do no find any merit in the contention of the Appellant, however, while disposing of this appeal, we relegate the Appellant to take its remedy in accordance with law much less by filing an appropriate application through IRP before the Tribunal in terms of Section 12A and 30A. If any such effort is made by the Appellant within a period of 15 days, the IRP may file the application before the Tribunal. The order of stay dated 18.06.2025 shall continue till the application, intended to be filed by the Appellant through the IRP, is decided in one way or other. The said FC shall also be at liberty to file an appropriate application before the Tribunal to contest the said application in accordance with law." 20. The above judgment also does not come to any aid of the appellant, since in the above case appellants were praying to close the CIRP by NCLAT by exercise power under Rule 11. Financial creditor has already filed the claim. The above case is clearly distinguishable and does not help the appellant. 21. Learned counsel for the respondent has placed reliance on the judgments of the Hon'ble Supreme Court in 'GLAS Trust Company LLC' (supra), as well as in 'Abhishek Singh' (supra....
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....t 35 claims of creditors both operational and financial has been filed in the meantime. Withdrawal of the CIRP was opposed by IRP. Hon'ble Supreme Court in the above facts of the circumstances has observed that claim of other creditors does not whittled down or adversely affected if the settlement with operational creditor is accepted. In paragraph 28, following was observed: Multiple claims of OCs 28. With respect to the said objection, it only needs to be mentioned that other creditors would have their own right to avail such legal remedies as may be available to them under law with respect to their claims. The rights of the creditors for their respective claims do not get whittled down or adversely affected if the settlement with the OC in the present case is accepted and the proceedings allowed to be withdrawn. 23. Hon'ble Supreme Court in the above case has also examined the legality of the impugned order and after noticing the entire procedure under Section 12A read with Regulation 30 of the CIRP Regulations, 2016 in paragraphs 37 & 42, Hon'ble Supreme Court laid down following: "37. Section 12-A IBC permits withdrawal of applications admitted un....
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....application for withdrawal of the proceedings was filed when the CoC was not constituted, hence there could not have been any other parties concerned except the operational creditor, corporate debtor and IRP. It was due to delay caused by NCLT in disposing of the application, large number of creditors filed their claim. In paragraphs 43 & 44, following was directed: "43. Regulation 30-A of the IBBI Regulations provide a complete mechanism for dealing with the applications filed under such provision. The issue raised by the IRP regarding its claim for expenses is well taken care of under the said provision. Various safeguards have been provided in Regulation 30-A of the IBBI Regulations to be fulfilled by the OC which apparently have been fulfilled as there is no complaint in that regard either by the IRP nor it is apparent from the impugned order [Huhtamaki PPL Ltd. v. Manpasand Beverages Ltd., 2021 SCC OnLine NCLT 9952] of NCLT. Thus, the objection raised by the IRP does not merit any consideration in this appeal. 44. For all the reasons recorded above, the impugned order [Huhtamaki PPL Ltd. v. Manpasand Beverages Ltd., 2021 SCC OnLine NCLT 9952] of NCLT cannot b....