TMI Blog2021 (2) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... approved by 90% voting share of the CoC but herein the case in hand, it is admitted fact that the CoC which constitute the sole member of SBI by 100% voting approved the withdrawal. But so far the first element is concerned i.e. the application must be filed by the person on whose prayer application is admitted under Section 7, 9 or 10 is not established by the IRP/applicant of this present application and it is admitted fact that the present application has been filed by the IRP and not by the applicant. In view of Section 12A the application must be filed by the applicant whose application is admitted u/s 7 or 9 or 10 IBC and nowhere either in the IBC or the in the Regulations, it is mentioned that any person other than applicant, whose application is admitted is empowered to file an application. Of course, under the Regulations it is mentioned that the application must be filed through the IRP or the RP the case may be but it never says that the application will be filed at the instance of the Corporate Debtor or the member of the CoC if it is not duly signed or filled by the applicant, therefore, we are unable to accept the contention of the IRP that in view of the directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the appeal and also the claim of the Operational Creditor and the interim stay passed by the Hon'ble NCLAT was vacated and the IRP was directed to take further action with regard to CIRP. v. That in pursuance to the NCLAT order, CoC was constituted by the IRP on 05.10.2020 with the sole claim of a Financial Creditor namely State Bank of India for ₹ 12,66,000/- and the report of Constitution of CoC in accordance with Regulation 17 was filed with this Adjudicating Authority on 05.10.2020, vi. That the First meeting of Committee of Creditors was called on 07.10.2020 through Video Conferencing. vii. That as per Item No. 9.1 of the Agenda of the First CoC the Suspended Director of the Corporate Debtor sought approval for settlement of the claim amount of State Bank of India, Hitech City Branch, wherein the Loan taken for financing of Motor Vehicles was fully paid by the Suspended Director. The matter for clearing of Loan amount and closure of Loan Account was put to vote and passed by 100 % voting share in favour of the matter. viii. That in Item No. 9.2 of the Agenda of the COC, the matter of approval of withdrawal of the case under Section 12A of IBC 2016 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hon'ble NCLAT has not been challenged by the Operational Creditor. It is submitted that the Operational Creditor has no interest in the CIRP process, the contention of the Operational Creditor is devoid of any merit. B. That the present application has been filed by the IRP in the interest of Corporate Debtor to run it as a going concern in terms of concluding part of para 23 of the order dated 25.09.2020 passed by Hon'ble NCLAT in the Company Appeal No. 295/2020 which is reproduced herein below: We also hope that the stakeholders as well as the IRP and COC shall keep in mind that IBC is a beneficial legislation which is not meant to put going concern/entities in resolution for small acts of commission or omission which can be rectified C. That, the IRP further submits that the form FA has been filed for the purpose of the withdrawal of CIRP process. As per the format, the FA form should be signed by the applicant, the IRP had sent the email dated 17.10.2020 to Operational Creditor for his signing the Form FA. But No response was received by the RP for the said mail dated 17.10.2020, even verbal telecommunication had also taken place between IRP and Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With respect to the other claim of ₹ 50,32,028/- the Hon'ble NCLAT in para 20 of the order has already observed that the second claim of the Operational Creditor of ₹ 50,32,028/- may not qualify under Section 8 and 9 of the Code. b) The Operational Creditor cannot be part of the CoC. There was only one financial creditor in the CoC namely State Bank of India. The CoC with 100% majority approved the withdrawal. c) The NCLAT in para 23 has also observed that CoC while considering everything will take note of the Corporate Debtor as a going concern. iv. At the early stages of the Code, when the settlement was taken place after the admission between Operational Creditor and Corporate Debtor, there was no power vested with the NCLT to take on record such settlement. It is the Hon'ble Supreme Court under Article 142 of the Constitution of India were allowing the settlement between the Operational Creditor and Corporate Debtor by passing appropriate orders (Mother Pride Dairy India Pvt. Ltd Vs. Portrait Advertisement and Marketing Pvt. Ltd. - Civil Appeal No. 9286 of 2017). v. Later on, under Rule 11 of the NCLT Rules, 2016, the NCLT and Hon'ble NCLAT h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon'ble NCLAT in Company Appeal No. 205 of 2020, the CoC considered the withdrawal application and by 100% voting resolved to file an application for withdrawal under Section 12A of the IBC, 2016. He further submitted that in pursuant of that resolution, which is at page 76 of the paper book as Item No. 9.2 approved the resolution for the withdrawal of the case pending before the NCLT. He further submitted that and in pursuant of that Resolution the present application is filed. 8. He further submitted that so far the objection raised by the Operational Creditor is concerned, the claim of the Operational Creditor in respect of ₹ 367200/- has been accepted but so far the claim of the Operational Creditor in respect of ₹ 5032028/- is concerned that claim is not accepted. He further submitted that since the Hon'ble NCLAT in para 23 of the judgment observed that IRP should protect the interest of the Corporate Debtor to run it as a going concern therefore, the CoC consider the same and approved the withdrawal after the matter was settled by the Sole Financial Creditor. 9. He further submitted that signature on Form FA is a procedural aspect and the Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. He further submitted that only the applicant shall file Form FA and application for withdrawal under Section 12A and the IRP is not empowered to sign an withdrawal application without the consent of the applicant. 17. Now, in the light of the submissions raised on behalf of the parties, now we consider the maintainability of the application filed by the IRP, it is admitted fact that the Operational Creditor had filed an application for initiation of the CIRP against the Corporate Debtor and on his application, the CIRP was initiated and subsequently, the CoC was constituted in which State Bank of India being the sole financial creditor is the sole member of the CoC and it is also admitted that the State Bank of India has approved the withdrawal by 100% voting. 18. Before considering the merits of the submissions, we would like to refer Section 12A and Regulation 30A and the same are quoted below: Section 12A: Withdrawal of application admitted under section 7, 9 or 10. 12A. The Adjudicating Authority 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code. . 19. Mere plain reading of Section 12A shows that the Adjudicating Authority may allow the withdrawal application admitted under Section 7, 9 or 10 on an application made by the applicant with the approval of the 90% of the voting share of the CoC. Therefore, to file an application under Section 12A, the applicant is required to establish two elements i.e. first, the application must be filed by the applicant on whose prayer application under Section 7, 9 or 10 is admitted and secondly, it must be approved by 90% voting share of the CoC but herein the case in hand, it is admitted fact that the CoC which constitute the sole member of SBI by 100% voting approved the withdrawal. But so far the first element is concerned i.e. the application must be filed by the person on whose prayer application is admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are unable to accept the contention of the IRP that in view of the directions given by the Hon'ble NCLAT, the IRP has filed the application. 22. At this juncture, we have again gone through the decision of the Hon'ble NCLAT in Civil Appeal No. (IB) 205 of 2020 and we notice that the paragraph which the IRP has referred, no where any direction was given by the Hon'ble NCLAT to the IRP or the CoC to consider the withdrawal of the CIRP rather there is specific direction given to the IRP, in the concluding portion of the order, to take further action with regard to the CIRP. In our considered view it does not mean that any direction was given to the IRP to withdraw the CIRP unless an application is filed by the applicant. 23. For the reasons discussed above, in our considered view since the application is not filed by the applicant, on whose application CIRP is initiated therefore, the present application filed by the IRP even after the approval by the CoC by 100% voting, is not maintainable and liable to be dismissed. 24. Accordingly, we find no merit in the application. Hence, we hereby reject the prayer of the IRP to allow him for the withdrawal of Company Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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