TMI Blog2021 (7) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... imultaneously they also submitted before this Adjudicating Authority that settlement talks were also going on with the Corporate Debtor. Locus of the applicant - HELD THAT:- a person who is aggrieved or whose interests are going to be prejudiced would prima facie have a locus to file an application as a stranger to the proceedings cannot approach. In the present case, this application has been filed by a joint shareholder and it has not been the case of Interveners that such joint shareholder is not having any interest in the subject matter. Therefore, the prima facie locus of the applicant gets established. Under which provision of law, the impugned application needs to be dealt with? - HELD THAT:- The question of non-applicability of Regulation 30A of IBBI (Corporate Insolvency Resolution Process for Corporate Persons) Regulation, 2016, being an instance of not being in terms with the provisions of Section 12A of IBC, 2016 has been raised by the applicant and it has also been contended that Rule 11 of NCLT Rules, 2016 was applicable whereas Interveners have pleaded that this application needs to be considered in accordance with the provisions of said Regulation - On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since commencement of CIRP till date - Application filed under Rule 11 of NCLT Rules, 2016 stands allowed. - IA 18 (AHM)/2021 in CP (IB) 759 (AHM) 2019 and Inv. P. 1 (AHM)/2021 in IA 18/2021 - - - Dated:- 29-6-2021 - M.B. Gosavi, Member (J) And Virendra Kumar Gupta, Member (T) For Appearing Parties : Gopal Jain, Saurabh Soparkar, Learned Senior Counsels, Shubhabrata Chakraborti, Arjun Sheth, Raheel Patel, Ankur Jain, Kazvin Kapadia, Learned Counsels and Ketul Patel, IRP ORDER Virendra Kumar Gupta, Member (T) 1. This application has been filed by M/s. Sin tex Plastics Technology Limited for withdrawal of Corporate Insolvency Resolution Process (hereinafter referred to as CIRP ) under Rule 11 of NCLT Rules, 2016 r.w. Section 60(5) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IBC, 2016 ). 2. This application has been filed for setting aside the order of CIRP passed by this Adjudicating Authority on 18.12.2020 by a shareholder of the Corporate Debtor on the basis of the settlement between the Original Operational Creditor and Respondent no. 2 whereby dues of Operational Creditor have been paid and settled. There are two Intervenors who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020 is relevant: IRP admits that COC has not been constituted till date. In view of this factual position and keeping in view the dictum of the Hon'ble Apex Court in Swiss Ribbons and Ors. v. Union of India and others, the Corporate Debtor may avail the opportunity of seeking exit from corporate insolvency resolution process at the stage of pre-constitution of COC...It would, therefore, be appropriate for the appellant to approach the Adjudicating Authority to seek exit from CIRP by filing the terms of settlement and the Adjudicating Authority will have to pass the appropriate order. Liberty is granted to the respondent to oppose such motion if permissible in law. 6. Pursuant to the aforesaid order of NCLAT, the Applicant herein has filed the present application before this Hon'ble Adjudicating Authority, where such Hon'ble Adjudicating Authority, keeping in view the ratio laid down by the Hon'ble Supreme Court in the case of Swiss Ribbons, is required to consider whether exit may be given to the Corporate Debtor from the CIRP process at the stage of the Constitution of COC. 7. That the relevant ratio of the Hon'ble Supreme Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (See also State of Kerala and Ors. v. Unni and Anr. AIR 2007 SC 819; A.P. Electricity Regulatory Commission v. R.V.K. Energy Pvt. Ltd. and Anr. 2008(9)SCALE 529) 19. The power of the regulation making authority, thus, must be interpreted keeping in view the provisions of the Act..... 13. That attention of the Hon'ble Adjudicating Authority is drawn to the unamended regulation 30A of CIRP Regulations, wherein the language was such that a withdrawal application under section 12A of the IB code could take place only before the issuance of invitation for expression of interest. The unamended regulation 30A of CIRP Regulations reads as follows: An application for withdrawal under section 12A shall be submitted to the interim resolution professional or the resolution professional, as the case may be, in Form FA of the schedule before the issue of invitation for expression of interest under regulation 36A. 14. The Hon'ble Supreme Court in the order dated 14/12/2018 in the case of Brilliant Alloys Private Limited v. S. Rajagopal Ors. SLP no. 31557 of 2018, lays down the following: The only reason why the withdrawal was not allowed, though agreed to by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IRP proceedings on account of bipartite settlement 20. That the Applicant places reliance upon judgment dated 12/02/2019 passed by Hon'ble NCLAT in the case of Jogendra Kumar Arora v. Dharmendra Sharma Ors. placed on record at page 17 of the rebuttal affidavit of the Applicant, wherein the following is stated by the Hon'ble NCLAT: 4. Mr. A.M. Ranjan Kumar, Advocate wanted to intervene on behalf of the Eight Financial Creditors to oppose the prayer. He submitted that the Eight Financial Creditors have already submitted their claim before the 'Resolution Professional'. However, parties having settled the matter prior to constitution of 'Committee of Creditors', we are not inclined to entertain any application for creditors. 5. Further in view of the decision of the 'Swiss Ribbons Pvt. Ltd. Anr., and in exercise our inherent powers under Rule 11 of the NCLAT Rules, 2016 allow the prayer made by Mr. Dharmender Sharma for withdrawal of the application in view of the settlement already reached. We accordingly set aside the impugned order dated 10th January, 2019 and dismiss the C.P. (IB) No. 158/Chd/Hry/2018 as withdrawn. 7. Taking int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 07/09/2020 placed on record in the rebuttal affidavit of the Applicant from page 21 onwards. 27. That the orders of the Hon'ble Delhi High Court have been suppressed by KKR before this Hon'ble court. 28. That the reliance on such forensic report tantamount to contempt of Delhi High Court orders. Other IB petitions pending against the CD 29. that the list of pending insolvency petitions against the Corporate Debtor is set out at pages 8 and 9 of the affidavit of KKR. 30. It is stated that of the 13 petitions set out. 12 of them are filed by operational creditors, and there is only one financial creditor petition being that of KKR itself. 31. That the total dues of the said 12 operational creditor petitions is only approximately ₹ 19 crores (page 9 paragraph 41 of the rebuttal affidavit of the Applicant). 32. It is submitted that there are serious disputes with such operational creditors qua the subject matter of their respective section 9 petitions. 33. It is submitted that in the event the Corporate Debtor wanted to pay off said ₹ 19 crores, it could very easily have done the same, since the Corporate Debtor has cash of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I state that the officers of the Corporate Debtor have requested for procurement of some material from 2 related party vendors. The said items to be procured antibacterial antimicrobial master batches and leads of banks which are necessary for continued and unimpeded production of your range of water storage tanks which are the company's flagship product All plants are running uncritically low volumes of these items and failure to procurement cause production stoppages. As per management, these parties a single source supplier and creation of alternative windows will be a time taking exercise due to specialise nature of products sourced. 12. I state that under section 28 of the code, approval of the COC is required for related party transactions. However, since there is presently deferment of formation of COC as per the direction of the Hon'ble a plate authority which is extended by this Hon'ble Tribunal no payments have been sanctioned to the related parties. The officers of the Corporate Debtor have raised concerns of shortage of material and in absence of procurement of materials may lead to stoppage of production in very important segment of product line whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble NCLAT in support of its claim that this kind of Intervenors had no locus in such cases. (iii) The plea taken by the Intervenors that impugned applications under Section 9 of IBC, 2016 are also pending does not stand in law as in most of the cases, the Corporate Debtor has got strong case on merits and the amount involved in these applications can be paid based upon the negotiations which may take place between the Corporate Debtor and such Operational Creditors as the funds available with the Corporate Debtor were more than sufficient to settle such Operational Creditors. It is also contended that such applications are already before this Adjudicating Authority and allowing withdrawal of CIRP under Section 12A of IBC, 2016 r.w. Rule 11 of NCLT Rules, 2016 would not prejudice the cause of action or merit of the applications filed under Section 9 of IBC, 2016. (iv) Applicant has placed reliance on various judicial decisions to support his case. 6. On the other hand, the plea taken by both Intervenors is that specific Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 exists and Form-FA has also been prescribed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that a settlement could be worked out between M/s. KKR India Financial Services and Corporate Debtor. It is also to be noted that only one more party has approached this Authority opposing this application who is also a Financial Creditor, though, there are other financial lenders as well. It is also an admitted position that none of the Operational Creditors has filed the application under Section 9 of IBC, 2016 opposing this application. 9. Now, having discussed the factual background, the first question which arises for our consideration is that under which provision of law, the impugned application needs to be dealt with? The question of non-applicability of Regulation 30A of IBBI (Corporate Insolvency Resolution Process for Corporate Persons) Regulation, 2016, being an instance of not being in terms with the provisions of Section 12A of IBC, 2016 has been raised by the applicant and it has also been contended that Rule 11 of NCLT Rules, 2016 was applicable whereas Interveners have pleaded that this application needs to be considered in accordance with the provisions of said Regulation. In this regard, we would have to look into the legislative history relating to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity may allow the withdrawal of application admitted Under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of ninety per cent voting share of the committee of creditors, in such manner as may be specified. 50. The ILC Report of March 2018, which led to the insertion of Section 12A, stated as follows: 29.1 Under Rule 8 of the CIRP Rules, the NCLT may permit withdrawal of the application on a request by the applicant before its admission. However, there is no provision in the Code or the CIRP Rules in relation to permissibility of withdrawal post admission of a CIRP application. It was observed by the Committee that there have been instances where on account of settlement between the applicant creditor and the corporate debtor, judicial permission for withdrawal of CIRP was granted [Lokhandwala Kataria Construction Pvt. Ltd. v. Ninus Finance Investment Manager LLP, Civil Appeal No. 9279 of 2017; Mothers Pride Dairy India Private Limited v. Portrait Advertising and Marketing Private Limited, Civil Appeal No. 9286/2017; Uttara Foods and Feeds Private Limited v. Mona Pharmachem, Civil Appeal No. 18520/2017]. This practice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers Under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case. 53. The main thrust against the provision of Section 12A is the fact that ninety per cent of the committee of creditors has to allow withdrawal. This high threshold has been explained in the ILC Report as all financial creditors have to put their heads together to allow such withdrawal as, ordinarily, an omnibus settlement involving all creditors ought, ideally, to be entered into. This explains why ninety per cent, which is substantially all the financial creditors, have to grant their approval to an individual withdrawal or settlement. In any case, the figure of ninety per cent, in the absence of anything further to show that it is arbitrary, must pertain to the domain of legislative policy, which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in Rule 11 of NCLT Rules, 2016 and NCLAT Rules, 2016. While allowing applications for withdrawal of CIRP, the Benches took various factors into consideration based upon the facts of each case before allowing or rejecting such applications. However, as noted in HC report, March 2018, even then both NCLT and NCLAT preferred settlement being reached amongst all creditors and the debtor, for the purpose of withdrawal to be granted, and not only the application creditor and the debtor. Thus, consideration of interest all creditors including of those creditors whose applications were already pending or who objected to such withdrawal, has been a fundamental consideration while setting aside the CIRP. The other mechanism which was adopted in the absence of any specific provisions in the CODE, Rules and Regulations was that the Hon'ble Supreme Court was approached under Article 136 to the Constitution of India for setting aside the order of CIRP on account of settlement. When such instances became quite frequent, the Hon'ble Supreme Court in the case of Uttara Foods and Feeds Private Limited vs. Mona Pharmachem observed that the some specific provisions were the necessit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To The Adjudicating Authority [Through the Interim Resolution Professional/Resolution Professional] [name of corporate debtor] Subject: Withdrawal of Application admitted for corporate insolvency resolution process of [name of corporate debtor] I, [name of applicant], had filed an application bearing [particulars of application, i.e., diary number/case number] on [Date of filing] before the Adjudicating Authority under [Section 7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016. The said application was admitted by the Adjudicating Authority on [date] bearing [case number]. 2. I hereby withdraw the application bearing [particulars of application i.e., diary number/case number] filed by me before the Adjudicating Authority under [Section 7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016. 3. I request the Committee of Creditors to approve my application for withdrawal. 4. I authorize the resolution professional to file this application of withdrawal with the Adjudicating Authority on my behalf, if it is approved by the Committee of Creditors with ninety percent voting power. 5. I attach the required bank guar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded some already existing Regulations. Regulation 30A was amended by inserting Clause (a) in sub-regulation 1 of Regulation 30A which provided for withdrawal of application before constitution of COC by application through Interim Resolution Professional. Consequential amendments have been made in subsequent sub-regulations. In sub-regulation 6, it is provided that the Adjudicating Authority may approve the withdrawal application submitted either in case of pre-constitution stage of COC or post constitution of COC. There are some other sub-regulations have been added to facilitate the process without any hassle. Form FA has also been amended in conformity with amended Regulation 30A. Revised Regulation 30A and Form FA dated 25.07.2019 are reproduced as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016] [Date] To The Adjudicating Authority [Through the Interim Resolution Professional /Resolution Professional] [name of corporate debtor] Subject Withdrawal of Application admitted for corporate insolvency resolution process of [name of corporate debtor] 1, [Name of applicant], had filed an application bearing [particulars of application, i.e., diary number/case number] on [Date of filing] before the Adjudicating Authority under [Section 7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016. The said application was admitted by the Adjudicating Authority on [date] bearing [case number]. 2. I hereby withdraw the application bearing [particulars of application, i.e., diary number/case number] filed by me before the Adjudicating Authority under [Section 7/Section 9/Section 10] of the Insolvency and Bankruptcy Code, 2016. 3. I attach the required bank guarantee as per sub-regulation (2) of regulation 30A. (Signature of the applicant) Date: Place: [Note: In the case of company or limited lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess for carrying out the provisions of the CODE. As noted earlier, such regulations are inferior to both provisions of CODE and Rules made by Central Government. Two questions arise for our consideration: (i) when various amendments were made by an ordinance, we do not find any reason as to why provisions of Section 12A could not be amended itself and consequently, an amendment made in regulation 30A would have been in parity if the required amendment, in Section 12A would have been carried out firstly. Such approach of the legislature, in fact, leads to an inference that legislature thought it fit to leave disposal of such cases to the discretion of Adjudicating Authority /NCLAT under Rule 11 of respective Rules, (ii) Second question which is critical and important from the aspect of constitutional propriety is whether the route of delegated legislation/subordinate legislation can be resorted to in such manner particularly when that exercise results into a manifest inconsistency between the substantive provision of law and such subordinate legislation. It may not be out of place to mention that Hon'ble Supreme Court in the absence of provision at the nature of Section 12A aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B code', the Central Government framed the rules known as Insolvency 85 Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as Adjudicating Authority Rules, 2016). As per Rule 41, a 'Financial Creditor' required to apply itself or jointly in an application under Section 7 in terms of Form-1 attached thereto. Part V of Form-1 deals with particulars of 'Financial Debt' (documents, record and evidence of default), as quoted below:- PART V PARTICULARS OF FINANCIAL DEBT [DOCUMENTS, RECORDS AND EVIDENCE OF DEFAULT] 1. PARTICULARS OF SECURITY HELD, IF ANY, THE DATE OF ITS CREATION, ITS ESTIMATED VALUE AS PER THE CREDITOR. ATTACH A COPY OF A CERTIFICATE OF REGISTRATION OF CHARGE ISSUED BY THE REGISTRAR OF COMPANIES (IF THE CORPORATE DEBTOR IS A COMPANY) 2. PARTICULARS OF AN ORDER OF A COURT, TRIBUNAL OR ARBITRAL PANEL ADJUDICATING ON THE DEFAULT, IF ANY (ATTACH A COPY OF THE ORDER) 3. RECORD OF DEFAULT WITH THE INFORMATION UTILITY, IF ANY (ATTACH A COPY OF SUCH RECORD) 4. DETAILS OF SUCCESSION CERTIFICATE, OR PROBATE OF A WILL, OR LETTER OF ADMINISTRATION, OR COURT DECREE (AS MAY BE APPLICABLE), UNDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) leads to a situation where as of now no manner remains specified by IBBI and this lacuna leads to litigation as regard to what cost were considered as CIRP costs and what was the quantum of such costs in the resolution plan. Another situation which can be noted is in relation to an application filed before this Authority for non-implementation of resolution plan approved. Section 33(3) provides that any person, other than the corporate debtor, whose interests are prejudicially affected by an act of contravention of resolution plan by the successful resolution applicant, such person can file an application to the Adjudicating Authority for passing of a liquidation order. In Regulation 39(9), it is provided that a creditor who is aggrieved by non-implementation of resolution plan approved under sub-section 1 of Section 31 may apply to the Adjudicating Authority for directions. Such regulation does not specify as to what directions can be given on happening of event of non-implementation of an approved resolution plan other than the order of liquidation under Section 33(3) of the CODE. This sub-regulation has been brought on CIRP Regulation w.e.f. 24.01.2019 and it is in an apparent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its limitation in view of scope of powers delegated to IBBI by enabling Section 240 of IBC, 2016 that it could not make a Regulation independent of Section 12A of IBC, 2016 for the reason that power to make Regulation 30A is itself derived therefrom as Section 12A provides as in such manner as may be specified . The term specified has been defined in Section 3(32) of the Code, it means that specified by Regulations made by IBBI under this Code. 11. Thus, on the basis of above legal analysis, it can be safely concluded that in a situation where COC is not formed after admission of Corporate Debtor into CIRP, Rule 11 of NCLT Rules, 2016 would be applicable and not the Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as pleaded by the Intervenors. Although, substantial aspects in respect of this issue have already been considered in the aforesaid case, as reproduced here-in-before which are sufficient to dispose of the matter by exercising inherent powers of Rule 11 of NCLT Rules, 2016, however, a specific plea has also been raised on behalf of applicant that Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons to be laid before Parliament. - Every rule and every regulation made under this Code shall he laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation. 12. From the perusal of Section 239 and Section 240 of IBC, 2016, it is apparent that a general power of making Rules and Regulations for carrying out the provisions of this Code has been given to both Central Government and IBBI. It is noteworthy that under Section 240(1) of IBC, 2016, an obligation has further been cast upon IBBI to make Regulations co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which such contravention continues. (4) Every rule made under this section and every regulation made by Securities and Exchange Board under this Act, shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation. 14. On the face of it, provisions of provisions of Section 469(2) of Companies Act, 2013 give much wider powers to Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.] 15. Before, proceed with comparative analysis of provisions of Section 469 of Companies Act, 2013 and Section 642 of Companies Act, 1956, it is pertinent to mention that Section 426 was introduced by an amendment in 2002 which was almost analogous to Section 469 as it exists today. Section 642(1), as noted, had two clauses (a) 8B (b) which have been merged in Section 469(1) of the Companies Act, 2013. The provision contained in Section 469(2) did not exist, hence, this is a material departure. Further, Section 469(2) can be split in two parts for proper understanding. First part-without prejudice to the generally of provision of sub clause (1), Central Government may make rules for all or any of the matters which by this Act are required to be, or may be pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not been so in the case of Section 239 and Section 240 of IBC, 2016 and, in our view, rightly so considering the fact that IBC, 2016 is a new legislation. Following this, we have looked into the validity of Regulation 30A of IBBI (CIRP) Regulations, 2016 made in terms of Section 240(1) of IBC, 2016 to a limited extent that such provision, being inconsistent to the provisions of the Code, cannot be applied in the facts and circumstances of the case in view of provisions of Section 240 of IBC, 2016. 17. Admittedly, NCLT is the Adjudicating Authority in terms of provisions of Section 5(1) of IBC, 2016. The Hon'ble Supreme Court, in the case of B.K. Educational Society, has also held that provisions of NCLT Rules, 2016 would be applicable while discharging of the functions by NCLT as Adjudicating Authority under IBC, 2016. Thus, having regard to provisions of Section 469(2) of Companies Act, 2013, NCLT can exercise its inherent jurisdiction under Rule 11 of NCLT Rules, 2016 for a situation not specifically covered under any provisions of IBC, 2016. It is needless to mention that NCLT Rules, 2016 are also applicable to IBC proceedings where no specific Rules/Regulations have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose interests are going to be prejudiced would prima facie have a locus to file an application as a stranger to the proceedings cannot approach. In the present case, this application has been filed by a joint shareholder and it has not been the case of Interveners that such joint shareholder is not having any interest in the subject matter. Therefore, the prima facie locus of the applicant gets established. In this regard, we may further add that various stakeholders are involved and having regard to preamble of IBC, 2016, an interested stakeholder can approach this Authority with the request to exercise its inherent jurisdiction under Rule 11 of NCLT Rules, 2016 in respect of proceedings of this nature subject to compliance of other legal requirements. In this view of the matter and after holding that Regulation 30A of IBBI (CIRP) Regulations, 2016 is not applicable, we reject the contention of the Intervenor that application must be filed by IRP at the instance of concerned Operational Creditor. Fourth aspect, whether facts of the case justify the exercise of inherent jurisdiction at all or not? As far as first two aspects are concerned, we have already discussed the legal posit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their claims during the CIRP process or to such creditors whose applications under Section 7 or 9 of IBC, 2016 are pending though they have not opposed the application filed for withdrawal of CIRP. Thus, an opportunity of hearing can be given only to those creditors/stakeholders who come before this Adjudicating Authority during consideration of the application filed either under Section 12A of IBC, 2016 or Rule 11 of NCLT Rules, 2016 for setting aside an order of admission of a Corporate Debtor into CIRP. This is also so because if all the claimants have to be given opportunity even if they have not approached this Adjudicating Authority in the withdrawal of CIRP proceedings, that by-itself would make the process of withdrawal redundant as timelines are sacrosanct under IBC, 2016 and giving opportunity to all such stakeholders would defeat the very purpose of bringing Section 12A of IBC, 2016 on statute. Similar position applies to proceedings under Rule 11 of NCLT Rules, 2016 as the basic object of IBC, 2016 cannot be defeated even when the inherent jurisdiction under Rule 11 is exercised. In the present case, after the admission of a Corporate Debtor into CIRP, various applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders are employees/workmen whose families depend on the functioning and running of the Corporate Debtor as a going concern. Other categories of stakeholders are Financial Creditors and Operational Creditors or other creditors and the society as a whole who benefit from the economic activity being undertaken by Corporate Debtor. Further, considering the structure of IBC, 2016, it would be in the interests of all stakeholders including secured Financial Creditors and Operational Creditors to ensure the Corporate Debtor is not put into CIRP to the extent possible, otherwise, there may be a situation of substantial haircuts for all categories of stakeholders and in that process Operational Creditors being unsecured creditors including Government would be the main sufferers as they may even not get anything either in resolution or liquidation of the Corporate Debtor. Even otherwise, in the facts of the present case, having regard to the amount claimed by various Operational Creditors and financial resources available with the Corporate Debtor to meet such liabilities leads to a conclusion that Corporate Debtor can meet such obligations in the case of Operational Creditors where there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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