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TMI Blog2024 (12) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed by an Operational Creditor- Ispat Traders (India) Pvt. Ltd. under Section 9 of the IBC. CIRP against the Corporate Debtor commenced vide order dated 09.04.2024. On 17.04.2024, Resolution Professional issued public announcement calling upon creditors to submit their claims. Three Unsecured Financial Creditors submitted their claims. The 1st meeting of the CoC was held on 14.05.2024 in which meeting CoC consisted of three Unsecured Financial Creditors. The Interim Resolution Professional was confirmed as Resolution Professional. There was a settlement between the Operational Creditor and the Suspended Director of the Corporate Debtor. The Operational Creditor filed Form FA seeking withdrawal of the Insolvency Petition. IRP placed withdrawal proposal before the CoC. CoC in 3rd meeting held on 16.08.2024 gave its approval to withdrawal of the insolvency proceedings. Form FA had already been sent to the IRP by the Operational Creditor vide e-mail dated 12.08.2024. The CoC in its 3rd meeting passed resolution approving the withdrawal application under Section 12A of the IBC r/w Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Professional to withdraw IA No.1345 of 2024. The Suspended Director of the Corporate Debtor aggrieved by the order dated 12.11.2024 has filed Company Appeal (AT) (Ins.) No.2304 of 2024. 3. We have heard Shri Abhijeet Sinha, Learned Senior Counsel for the Appellant in both the Appeals and Shri Krishnendu Datta, Learned Senior Counsel for the Financial Creditor- MHIL. We have also heard Counsel appearing for the Resolution Professional. 4. Shri Abhijeet Sinha, Learned Senior Counsel for the Appellant submits that the application under Section 12A for withdrawal of the CIRP having been filed with the approval of the CoC which was taken with 100% vote share in 3rd CoC meeting dated 16.08.2024, the withdrawal of application was not permissible without the approval of the CoC. It is further submitted that the Resolution Professional was only a representative of the Operational Creditor and Resolution Professional had no jurisdiction and authority to withdraw the application under Section 12A. It is submitted that it is the Applicant i.e. the Operational Creditor who alone is entitled to withdraw the application filed under Section 12A and the Adjudicating Authority commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has voting share of 92.35% in the CoC. It is submitted that the withdrawal of the application under Section 12A without considering the claim of MHIL cannot be permitted. Counsel for the Respondent heavily relied on the judgment of the Hon'ble Supreme Court in "GLAS Trust Company LLC" (Supra). It is submitted that the decision was taken by the CoC on 16.08.2024 for permitting withdrawal of the CIRP that was prior to admission of the claim of MHIL on 16.09.2024. After 16.09.2024 when the MHIL as Financial Creditor has been accepted which has voting share of 92.35%, no withdrawal can be permitted. It is submitted that the Resolution Professional is obliged to bring all relevant facts in the notice of the Adjudicating Authority and in view of the subsequent events of admission of the claim of MHIL, Resolution Professional has rightly withdrawn Section 12A application since no withdrawal was permissible after admission of the claim of MHIL on 16.09.2024. It is submitted that the Appellant who is a Suspended Director of the Corporate Debtor has no role to play in application under Section 12A filed by the Resolution Professional and it is the Resolution Professional who has to conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C, the withdrawal of this IA filed by the Applicant/RP is allowed." 8. The submission which has been much pressed by the Appellant is that the Resolution Professional has no jurisdiction to pray for withdrawal of the application. We, thus, need to first examine whether the Resolution Professional had any jurisdiction or authority to file a purshish for withdrawal of the application. 9. We need to notice the statutory scheme pertaining to withdrawal of the CIRP. Section 12A of the IBC which deals with 'withdrawal of application' admitted under Sections 7, 9 and 10 provides as follows:- "12A. Withdrawal of application admitted under section 7, 9 or 10. -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. voting share of the committee of creditors, in such manner as may be specified." 10. Regulation 30A was inserted in the CIRP Regulations, 2016. After insertion of Section 12A in the IBC, Regulation 30A of the Regulations is as follows:- "30 A. Withdrawal of application. (1) An application for withdrawal under section 12A may be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 11. Regulation 30A clearly provides that application for withdrawal has to be filed through the Interim Resolution Professional or the Resolution Professional as the case may be. The copy of the application which has been filed under Section 12A has been brought on the record by the Appellant as Annexure 23 to the Appeal. Memo of parties indicate that Applicant is Nandish Sunilbhai Vin. Memo of the parties are as follows:- "MEMO OF PARTIES Nandish Sunilbhai Vin RP of Anupam Port Cranes Corporation Limited Registration No. IBBI/IPA-001/IP-P-02117/2020 2021/13270 Having its address at: C/53, Shanti Niketan Row House, Anand Mahal Road, Opp. Sagar Complex, Beside Sneh Sankul Wadi, Surat, Gujarat-395009 E: [email protected] ...Applicant Versus 1. Mr. Mehul Patel (Member of Suspended Board of Anupam Port Cranes Corporation Limited) Having its registered office at: 138, GIDC Estate. Vithal Udyognagar, Gujarat- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be submitted by the IRP rather than the parties themselves is not a distinction without difference. As noted above, once the application is admitted and CIRP is initiated, it is the IRP who takes charge of the affairs of the corporate debtor. The proceedings become collective proceedings and the interests of the former management of the corporate debtor, become disjunct from the interest of the corporate debtor. Therefore, the parties (such as the former management of the corporate debtor) must submit their application for withdrawal through the IRP who is now the person in control of the insolvency proceedings. To subvert this requirement would run contrary to the scheme of the IBC and the underlying principles discussed in this judgment; and b. Secondly, the NCLT cannot be considered a post office that merely puts a stamp on the withdrawal application submitted by the parties through the IRP. The ILC Report, in response to which, the parent provision, i.e. Section 12A was introduced in the IBC specifically discussed the possibility of the creditors, apart from the applicant creditor agreeing to a settlement as the underlying reason to permit withdrawal even after initiation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial Creditor who now controls the vote share of 92.35%. 17. Counsel for the Appellant has relied on Regulation 12(3) of the CIRP Regulations which provides as follows:- "12. Submission of proof of claims. (3) Where the creditor in 49[sub-regulation (1)] is [a financial creditor under regulation 8], it shall be included in the committee from the date of admission of such claim: Provided that such inclusion shall not affect the validity of any decision taken by the committee prior to such inclusion." 18. There can be no quarrel to the statutory scheme as delineated by Regulation 12(3). What is provided in Regulation 12(3) that validity of any decision taken by the committee prior to such inclusion shall not be affected. Present is not a case where anyone is impugning the validity of decision taken in the 3rd CoC meeting held on 16.08.2024. The withdrawal of the application under Section 12A is on account of subsequent event which has taken after 16.08.2024 i.e. admission of the claim of MHIL on 16.09.2024 i.e. much before the application filed under Section 12A could be heard or allowed. The Resolution Professional has rightly brought into the notice of the Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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