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TMI Blog2022 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency Resolution Process (For short "CIRP") against the Corporate Debtor (Karvy Data Management Services Limited) vide CP No. 31/9/HDB/2020, has filed this application under Section 12A of Insolvency & Bankruptcy Code, 2016 ("Code"), r/w. Rule 30A of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") praying this Tribunal to set aside the order dated 30.11.2021 ordering CIRP against the Corporate Debtor, citing post CIRP there was settlement between the operational creditor and the corporate debtor. 2. It is stated in the application that this Tribunal admitted the Petition in CP No. 31/9/HDB/2020 filed by the Operational Creditor vide its order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exit of the corporate debtor from CIRP, both at pre and post admission stages, before or after constitution of COC, besides confer discretionary power on the AA, to either allow or dismiss the prayer for such withdrawal. 8. Section 12A of the Code and 30A of CIRP Regulations which have come into force with effect from 06.06.2018 and 25.07.2019 respectively, are as follows:- Section 12A of IBC "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 percent voting share of the committee of creditors, in such manner as may be prescribed". Regulation 30A(1) of the CIRP Regulations Regulation 30A(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blication. It is needless to say that, the Code provides for fixing of timeframe by the IRP for submission of claims by Financial as well as Operational Creditors before the IRP and it is not stated that the said time has lapsed. 13. Therefore, the question that may arise is whether by allowing withdrawal of company petition, pursuant to a settlement between the CD and the Financial/Operational creditor since would deprive the financial/operational creditors of the opportunity to file their claims, if any, should "concerned persons" shall mean and include all the prospective financial/operational creditors who are entitled to file their claims pursuant to the public notice issued by the IRP consequent to the initiation of CIRP against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, in view of the changed circumstances, by filing necessary application before the Tribunal, to recall the said order. In so far as the third category of cases, the same can be continued before the Tribunal. Therefore, the argument that allowing withdrawal of the CIRP ordered against the Corporate Debtor, by virtue of a settlement would jeopardize recovery opportunity of the FC/OC, and amounts failure to hear the "concerned parties" is totally unfounded and mischievous. 15. Hon'ble Supreme Court of India in Civil Appeal No. 324/2020 in the matter of Ess Investments Private Limited vs. Lokhandwala Infrastructure Private Limited and Anr., in identical situation held as follows:- Para. 6: Since the disputes between the Respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being aware of the same. 19. However, placing reliance on the ruling of Hon'ble Supreme Court in Civil Appeal No. 324/2020 in the matter of Ess Investments Private Limited vs. Lokhandwala Infrastructure Private Limited and Anr., we are of the view that, while allowing a petition for withdrawal of CIRP against the Corporate Debtor, we should ensure that the interests of the Applicants who's Company Petitions were disposed of directing them to approach the IRP, shall be protected. We therefore, deemed conferred liberty on the Applicants, in the above Company Petitions to approach this Tribunal for recall of the order of closure of their company petitions, so that this Tribunal can decide their applications on merits. For this purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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