Case Note & Summary
The appeal was filed against an order dated 13.03.2026, which admitted a Section 7 application by Union Bank of India. An interim order was previously issued on 25.03.2026, preventing the constitution of the Committee of Creditors (CoC). During the hearing, the Appellant's counsel informed the Tribunal that a settlement had been reached with Union Bank, and Solapur Cooperative Bank had no objections as the account was regular. The Tribunal noted that for the withdrawal of the Corporate Insolvency Resolution Process (CIRP), the Financial Creditor must file an application under Section 12A of the Insolvency and Bankruptcy Code, 2016. The Tribunal modified the interim order to allow the IRP to constitute the CoC within a week and file the application under Section 12A within a further week. The Adjudicating Authority was directed to dispose of the application under 12A preferably within 30 days. The IRP was permitted to obtain the vote of the CoC before filing the application but was instructed not to take any further steps in the CIRP. The appeal was disposed of accordingly.
Headnote
A) Insolvency Law - Withdrawal of CIRP - Procedure for Withdrawal - Insolvency and Bankruptcy Code, 2016, Section 12A - The Financial Creditor must file an application under Section 12A for the withdrawal of the CIRP. The Tribunal modified the interim order to allow the constitution of the Committee of Creditors (CoC) and directed the IRP to file the application under Section 12A within a specified timeframe. Held that the Adjudicating Authority should dispose of the application under 12A preferably within 30 days (Paras 4-4).
Issue of Consideration
Whether the Corporate Insolvency Resolution Process (CIRP) can be withdrawn based on a settlement with the Financial Creditor.
Final Decision
The Tribunal modified the interim order to allow the constitution of the Committee of Creditors and directed the IRP to file an application under Section 12A within a specified timeframe. The Adjudicating Authority was instructed to dispose of the application under 12A preferably within 30 days.
Law Points
- Insolvency proceedings
- Committee of Creditors
- Section 12A application
- interim order modification
