Case Note & Summary
The National Company Law Appellate Tribunal addressed two appeals filed against an order dated 27.08.2025 by the National Company Law Tribunal, Kolkata, which allowed an application under Section 12A of the Insolvency and Bankruptcy Code, 2016 for the withdrawal of a Corporate Insolvency Resolution Process (CIRP). The corporate debtor, West Bengal Agro Textile Corporation Limited, faced a Section 9 application filed by operational creditor Jitendra Jain, alleging a default in payment of Rs. 1,19,36,635. A settlement agreement was reached between the corporate debtor and Jitendra Jain on 18.08.2025, leading to a request for withdrawal of the CIRP. The Interim Resolution Professional (IRP) filed an application for withdrawal on 25.08.2025, which was subsequently allowed by the adjudicating authority. The appellants contended that their pending Section 9 applications should have been considered before allowing the withdrawal. The court noted that the IRP had not published any notice or constituted a Committee of Creditors, and the withdrawal application was filed in accordance with the prescribed procedure. The court emphasized that the adjudicating authority was not required to hear all stakeholders before allowing the withdrawal, as no objections were raised by the appellants. The court ultimately upheld the adjudicating authority's decision, stating that the withdrawal was in accordance with the law and did not adversely affect the rights of other creditors (Paras 1-24).
Headnote
A) Insolvency Law - Withdrawal of Application - Procedure for Withdrawal - Insolvency and Bankruptcy Code, 2016, Section 12A - The adjudicating authority allowed the application for withdrawal of the Corporate Insolvency Resolution Process under Section 12A without hearing the appellants, who had filed independent applications under Section 9. The court held that the procedure under Regulation 30A permits withdrawal before the constitution of the Committee of Creditors, and no objections were raised by the appellants at the time of withdrawal (Paras 10-12).
Issue of Consideration
Whether the adjudicating authority erred in allowing the withdrawal of the Corporate Insolvency Resolution Process without considering the claims of the appellants.
Final Decision
The National Company Law Appellate Tribunal upheld the adjudicating authority's order allowing the withdrawal of the Corporate Insolvency Resolution Process under Section 12A of the Insolvency and Bankruptcy Code, 2016, stating that the procedure was followed correctly and no objections were raised by the appellants.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 12A
- Corporate Insolvency Resolution Process
- Regulation 30A
- Settlement Agreement
