2021 (7) TMI 663 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH , NEW DELHI

Seeking withdrawal of admitted application - Pre-constitution stage of CoC - submission of the Learned Counsel is that the ‘Operational Creditor’ has wrongly proceeded against the ‘Corporate Debtor’ instead of the sister concern and that the sister concern has already paid all the amounts claimed by the ‘Operational Creditor’ - HELD THAT:- Section 12-A read together with amended Regulation 30-A effective from 25.07.2019 provides that stage of pre-Constitution of CoC which is now covered in Regulation 30-A(1)(a). It is evident that Section 12-A deals with the situation of Withdrawal of Application admitted under Sections 7, 9 or 10, on an Application made by the Applicant with the approval of 90% voting share of the Committee of Creditors, in such manner as may be specified’, meaning thereby that Section 12-A refers to a situation Post Constitution of CoC, whereas Regulation 30-A(1)(a) deals with procedure to be followed Pre- Constitution of CoC. It is stated by the Learned Sr. Counsel that the language of the Section, whereunder IBBI has been empowered to frame Regulations is clear that the said Regulation should be consistent with the I&B Code.

Rule 11 of NCLAT Rules, 2016 provides that ‘Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal.’ - in the present case, there is no force in the contention of the proposed Intervenor Applicants that the Application for Withdrawal, filed, prior to Constitution of CoC ought to be mandatorily dealt with the provisions under the Regulation 30-A(1)(a).

It is not the case of the Intervenors that Demand Notice under Section 8 is pending. It is only their case that money is due. Before Constitution of Committee of Creditors mere filing of a ‘Claim’ does not constitute default per se. It is only on the basis of the ‘Claims’ that the CoC is constituted. In a catena of Judgements the Hon’ble Supreme Court has reiterated that the prime objective of the Court is not recovery, but revival - in the interest of Justice, the inherent powers under Rule 11 can be exercised by both NCLT and NCLAT which may allow or disallow the Application of Withdrawal keeping in view the interest of the concerned parties and the facts of each case.

Application allowed.