2020 (3) TMI 1286 - Tri - Insolvency and Bankruptcy

Prayer for withdrawal of application - Section 12A read with 30A of the IB Code - HELD THAT - In view of the settlement between the parties and on filing application under Section 12A the prayer of withdrawal of application is allowed. Accordingly moratorium so granted under Section 14 of the IB Code ceased to have effect and IRP is discharge from the duties. The Operational Creditor is directed to clear the dues of IRP as on today. It is submitted by the Learned Lawyer for the Operational Creditor that they have already cleared the dues of the IRP - The Adjudicating Authority do not find any impediment in allowing the petition so filed by the Operational Creditor under Section 12A of the IB Code through IRP duly executed by way of an affidavit. The instant application allowed and stand disposed-off as withdrawn.

Summary

Issues:
1. Application filed under Section 12A r.w 30A of the IB Code for withdrawal of CP(IB) 250/2019.
2. Settlement between parties and effect on moratorium under Section 14 of the IB Code.
3. Clarification by the Hon'ble Supreme Court regarding the power of NCLT in allowing withdrawal or settlement applications.

Analysis:

1. The judgment pertains to an application filed under Section 12A r.w 30A of the IB Code for the withdrawal of CP(IB) 250/2019. The Operational Creditor, represented by learned counsels and PCA, acknowledged receiving the due amount from the Respondent. Consequently, the application for withdrawal was filed through the IRP. The records indicated that the case was admitted on 08.01.2020, with subsequent mutual settlement between the parties on 18.02.2020. Despite the non-constitution of the COC, the withdrawal application was allowed, leading to the cessation of the moratorium under Section 14 of the IB Code. The IRP was discharged from duties, with directions for the Operational Creditor to clear any outstanding dues.

2. The settlement between the parties and the subsequent application under Section 12A resulted in the withdrawal of the case. The judgment highlighted the importance of complying with the settlement terms and clearing any dues promptly. The discharge of the IRP and the lifting of the moratorium reflected the resolution achieved through the withdrawal process, emphasizing the significance of honoring settlements in insolvency proceedings.

3. The judgment referenced the Hon'ble Supreme Court's clarification in the Swiss Ribbons Pvt. Ltd. case regarding the NCLT's power to allow withdrawal or settlement applications in the absence of a constituted COC. The Court emphasized the NCLT's authority, under Rule 11 of the NCLT Rules, 2016, to consider and decide on such applications after due deliberation and hearing all concerned parties. This clarification underscored the procedural aspects and the discretion vested in the NCLT to adjudicate on withdrawal or settlement petitions effectively.

In conclusion, the judgment meticulously addressed the withdrawal application under Section 12A, the impact of settlement on the moratorium, and the guidance provided by the Hon'ble Supreme Court regarding the NCLT's authority in such matters. The decision exemplified the adherence to legal procedures, the significance of settlements in insolvency cases, and the regulatory framework governing withdrawal applications in the absence of a constituted COC.