AI Structured Summary
Not yet generated for this judgment
Judgment
Abni Ranjan Kumar Sinha, J
A CA bearing no. CA-829/C-V/ND/2020 has been filed on behalf of the Operational Creditor/Applicant under Rule 11 of the NCLT Rules, 2016 with a prayer given below:-
a) take the present application on record and into consideration; and
b) allow the present application and pass appropriate Order(s), Direction(s) towards withdrawl of the CIR Process against the Corporate Debtor initiated vide Order dated 16.1.2020; and
c) pass such other/further appropriate Order(s), Direction(s) as may be deemed fit and proper by this Hon'ble Tribunal under the facts and circumstances of the present case.
We have heard Ld. Counsel appearing for the Applicant and perused of the averments made in the application. Ld. Counsel for the Applicant submitted that the Corporate Debtor approached the Applicant, negotiated and settled the matter by making payment vide post-dated cheques which are a matter of record. It was further submitted that the Applicant is satisfied towards the payment/initiation of payment by the Corporate Debtor however it reserves its due right to revive the subject petition and/or file a fresh petition if in accordance with law if/when the aforesaid cheques are dishonoured and/or the payments are not credited finally. It is also stated that in such an event that the Applicant will not be bound by any of the terms of the aforesaid settlement. So, in terms of settlement, the Applicant may be permitted to withdraw the case as per rules and in accordance with law. He further placed reliance upon the order passed by the Hon'ble NCLT, New Delhi Principal Bench dated 01.10.2019 in the case of Amit Mittal Versus M/s. Crystal Buildtech Pvt. Ltd. (IB)-937(PB)/2019.
In the light of the submissions raised on behalf of the Applicant, we have gone through the averments made in the application as well as the decision upon which the Applicant has placed reliance but before considering the submissions of the Applicant, we would like to refer the provisions contained under Section 12A of the Insolvency and Bankruptcy Code, 2016 ["Code"] which related to withdrawal of application admitted under Section 7, 9 and 10 of the Code alongwith Regulation 30A of Insolvency And Bankruptcy Board Of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016 ["CIRP Regulations"]. Both the sections are quoted below:
"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."
"30 A. 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 where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation.
(2) The application under sub-regulation (1) shall be made in Form FA of the Schedule accompanied by a bank guarantee-
(a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub-regulation (1); or
(b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub-regulation (1).
(3) 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 its receipt.
(4) Where an application for withdrawal is under clause (b) of sub-regulation (1), the committee shall consider the application, within seven days of its receipt.
(5) Where the application referred to in sub-regulation (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 sub-regulation (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."
Mere plain reading of the provisions shows that Section 12A of the Code inserted by the amendment dated 06.06.2018 under which an application which was admitted under Section 7, 9 or 10 of the Code can be withdrawn and Regulation 30A of the CIRP Regulations which has been amended recently on 25.07.2019 provides how the withdrawal applications filed under Section 12A of the Code can be entertained by the Adjudicating Authority while considering the prayer of withdrawal of applications which has been admitted under Section 7, 9 or 10 of the Code.
Mere plain reading of the amended provision made in the regulations shows that there are two circumstances under which withdrawal is permissible. One is after the admission of the application under Section 7, 9 or 10 of the Code and before the constitution of Committee of Creditors ["COC"] and second one is after the admission of the application under Section 7, 9 or 10 of the Code and after the constitution of the COC and appointment of Interim Resolution Professional ["IRP"]. The present application herein is admitted on 16.01.2020 and IRP was appointed and the Applicant was also directed to deposit of Rs. 2 lacs to meet the immediate expense of the IRP but here, in the place of IRP, the Applicant directly filed the application under Rule 11 of the NCLT Rules, 2016. In our opinion, since there is a specific provision under Section 12A of the Code for withdrawal of application admitted U/S 7, 9 & 10 of the Code and the procedures are prescribed under Regulation 30A of the CIRP Regulations for withdrawal of applications after the admission of application and before and after the constitution of the COC, therefore, we can say that before the constitution of the COC, the withdrawal application must be filed by the applicant through the IRP in view of Regulation 30A(1)(a) and application under Sub Rule (1) of the CIRP Regulations shall be made in Form-FA accompanied with bank guarantee and when such application is filed under Clause (a) of Regulation 30A(1) of the CIRP Regulations then the IRP is required to submit the application to the Adjudicating Authority within 3 days of its receipt but here in this case, the Applicant has filed the application without following the procedure laid down in terms of Section 12A of the Code read with Regulation 30A of the CIRP Regulations, he filed present application without informing the IRP. So far, the application filed under Rule 11, NCLT Rules, 2016 is concerned, since after amendment in Regulation 30A, there is a specific provision under the Code for the withdrawl of application, therefore, Rule 11 which confers inherent powers to the Tribunal, under which prior to amendment in Regulation 30A was used to be filed, is not applicable after amendment. So far the decision upon which the Applicant has placed reliance is concerned, we have gone through the said decision and we are of the view that in that decision the Principal Bench has not discussed Section 12A of the Code and Regulation 30A of the CIRP Regulations. Therefore, in our opinion, it is not applicable under the facts of the case in hand.
So, in our opinion, the present application is not maintainable and liable to dismissed.
Application is therefore dismissed.