Case Note & Summary
The appeal was filed against an order dated 28.03.2026 by the National Company Law Tribunal, Mumbai Bench, concerning Company Petition 488 of 2025. The appellant sought the appointment of Manoj Singhal as Resolution Professional, but the Tribunal directed the liquidation of the Corporate Debtor instead. The appellant argued that only an Operational Creditor, who was the sole member of the Committee of Creditors (CoC), had submitted a form to withdraw the proceedings. However, the Adjudicating Authority noted that the withdrawal application could only be initiated by the Financial Creditor, who was not a member of the CoC. The Tribunal considered the submissions and found that the debts of the Operational Creditor had been cleared by the Financial Creditor, a related party, and thus, the application for withdrawal was invalid. The court referenced a previous judgment to support its decision. Ultimately, the appeal was dismissed, affirming the liquidation order as the only viable option given the circumstances.
Headnote
A) Insolvency Law - Liquidation Proceedings - Authority's Decision - Insolvency and Bankruptcy Code, 2016, Section 12A - The Adjudicating Authority's decision to direct liquidation was upheld as the application for withdrawal was not filed by the initiating Financial Creditor, leading to no valid basis for permitting withdrawal. Held that the sole Operational Creditor's position did not allow for a withdrawal under the circumstances (Paras 5-7).
Issue of Consideration
Whether the Adjudicating Authority rightly directed for liquidation of the Corporate Debtor and denied the withdrawal application under Section 12A of the Insolvency and Bankruptcy Code, 2016.
Final Decision
The appeal was dismissed, affirming the decision of the Adjudicating Authority to direct liquidation of the Corporate Debtor.
Law Points
- Liquidation proceedings
- Resolution Professional appointment
- Committee of Creditors
- Withdrawal application
- Corporate Debtor
