TMI Blog2022 (1) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... dy constituted and is in existence. In the present case, the Application under Section 12A was filed on 25.08.2021 on which date settlement between the Appellants and the Corporate Debtor had already been entered. On the day when the Application was filed, there was no requirement of approval of ninety percent of voting share of Committee of Creditors - entire dues of the Appellant were paid by the Corporate Debtor under Memorandum of Settlement dated 25.08.2021. An Application was also filed on 25.08.2021 i.e. before the constitution of the Committee of Creditors. There was no requirement of directing for obtaining approval of ninety percent vote of Committee of Creditors for considering the Application. There was no fresh Application before the Adjudicating Authority apart from Application dated 25.08.2021 which was filed prior to the constitution of Committee of Creditors. The Adjudicating Authority without considering the facts and sequence of the events had refused to entertain the Application on the ground that it is not supported by ninety percent vote of Committee of Creditors - present is a case where the Application for withdrawal ought to be allowed permitting with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngwith cheque for an amount of ₹ 38,74,000/- was handed over to the Appellant. On 25.08.2021, Interim Resolution Professional filed an Application bearing IA No. 267/2021 under Section 12A of the Code read with Regulation 30A (1)(a) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 read with Rule 11 of the NCLT Rules, 2016 for withdrawal of Section 9 petition. Committee of Creditors (CoC) was constituted on 27.08.2021. On 03.09.2021, first meeting of the Committee of Creditors was held with two Financial Creditors namely- Kotak Mahindra Bank and M/s. Anjali Capfine Pvt. Ltd. . On 06.09.2021, Application I.A 267/2021 was listed before the Adjudicating Authority and on request made by the Interim Resolution Professional, hearing on Application was deferred. The Cheque of ₹ 38,74,000/- was presented by the Appellant and was returned unpaid. On 17.09.2021, the amount of ₹ 38,74,000/- was paid to the Appellant through RTGS and Addendum to Memorandum of Understanding dated 25.08.2021 was also executed confirming the entire payment including the payment of ₹ 38,74,000/- by the Appellant. I.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Financial Creditor- Kotak Mahindra who has 83% of vote share supported the Appellants submissions and submits that Application under Section 12A ought to have been allowed permitting withdrawal of Section 9 Application. It is submitted that the entire object of the IBC is to revive the Corporate Debtor. Recovery through IBC is not the object. 5. Learned Counsel appearing in Company Appeal (AT) (Insolvency) No. 893 of 2021 also adopts the submissions made by the Counsel for the Appellant in Company Appeal (AT) (Insolvency) No. 892 of 2021 and submits that the fact that part of payment subsequently made shall not affect the Application under Section 12A. It is submitted that the Interim Resolution Professional having filed the Application in the Court on 25.08.2021 ought not to have constituted the Committee of Creditors and ought to have persuaded the Application under Section 12A. 6. We have considered the submissions of the Learned Counsel for the parties and perused the record. 7. One of the main issues which has arisen for the consideration in these Appeals as to whether in the facts of the present case the approval of the Committee of Creditors for withdrawal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (4) is approved by the committee with ninety percent voting share, the resolution professional shall submit such application along with the approval of the committee, to the Adjudicating Authority on behalf of the applicant, within three days of such approval. (6) The Adjudicating Authority may, by order, approve the application submitted under subregulation (3) or (5). (7) Where the application is approved under sub-regulation (6), the applicant shall deposit an amount, towards the actual expenses incurred for the purposes referred to in clause (a) or clause (b) of sub-regulation (2) till the date of approval by 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. 10. The Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Anr. Vs. Union of India Ors.- (2019) 4 SCC 17 has held that at any stage, before a Committee of Creditors is constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already been entered. On the day when the Application was filed, there was no requirement of approval of ninety percent of voting share of Committee of Creditors. 13. When we look into the Regulation 30A, the scheme and procedure for filing withdrawal Application is made clear and specific. Sub-regulation (1) itself provides for Application of withdrawal to be made (a) before constitution of the Committee of Creditors, by the Applicant through the Interim Resolution Professional; (b) after the constitution of the Committee of Creditors, by the Applicant through the Interim Resolution Professional or the Resolution Professional, as the case may be. Sub-regulation (3) itself provides that where an Application for withdrawal is under clause (a) of sub-regulation (1), the Interim Resolution Professional shall submit the Application to the Adjudicating Authority on behalf of the Applicant, within three days of the receipt. Further, as per sub-regulation (4), where an Application for withdrawal under clause (b) of sub-regulation (1), the committee shall consider the Application, within seven days of its receipt. Sub-regulations (3) and (4) thus make it clear that when Application is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company petition on the ground that the matter has been settled between the parties. (6) The appeal is accordingly allowed. The order of the NCLT dated 06.08.2021 is hereby set aside and the company petition, for which withdrawal application was filed under Rule 11 of the NCLT Rules, is ordered to be withdrawn. No costs. 16. Learned Counsel for the Appellant has also placed reliance on judgment of this Tribunal in Company Appeal (AT) (Ins.) No. 283 of 2019- Sunil Tandon vs. Manoj Kumar Anand, I.R.P. Ors. where this Tribunal had in a case where Application under Section 9 prior to constitution of Committee of Creditors allowed the Application. 17. Another judgment of this Tribunal which also needs to be referred is judgment dated 07.07.2021 in I.A. No. 815 of 2021 in Company Appeal (AT) (Ins.) No. 298 of 2021- Anuj Tejpal vs. Rakesh Yadav Anr. . In paragraphs 40 41, following was laid down:- 40. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicants 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). We find it just and proper to exercise our inherent powers under Rule 11 in this case. 18. The above judgment cited by the Learned Counsel for the Appellant does support the submissions of the Learned Counsel for the Appellant. In any view of the matter in the facts of the present case, entire dues of the Appellant were paid by the Corporate Debtor under Memorandum of Settlement dated 25.08.2021. An Application was also filed on 25.08.2021 i.e. before the constitution of the Committee of Creditors. There was no requirement of directing for obtaining approval of ninety percent vote of Committee of Creditors for considering the Application. There was no fresh Application before the Adjudicating Authority apart from Application dated 25.08.2021 which was filed prior to the constitution of Committee of Creditors. The Adjudicating Authority without considering the facts and sequence of the events had refused to entertain the Application on the ground that it is not supported by ninety percent vote of Committee of Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X
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