In the matter of Ado Additives Mfg Private Limited

ORDER SHEET OF THEHEARING ON28TH FEBRUARY2025 KOREATRADEINSURANCECORPORATION IN THE MATTER OF VS ADOADDITIVESMFGPRIVATELIMITED UNDER SECTION IBCUNDERSEC9 Appearance(via video conferencing/physically) Ms.Tanvi Luhariwala, Adv. ]For theResolutionProfessional Mr. Manish Agarwal, RP ] OR DER 1. Learned Counsel for theResolutionProfessional present. 2. IA(I.B.C)/345(KB)2025: a. This is an application filed by the Resolution Professional to seek the following reliefs: “i. An order be passed recalling the order dated 5th June, 2022 and allowing thewithdrawalof theApplicationin C.P.(IB) No.40/KB/2022. ii. Such further orders or directions be passed as this Hon’ble Tribunal may deem fitandproper.” b. Submission of the learned Counsel appearing on behalf of the Resolution Professional. (i) That the Corporate Debtor was admitted into CIRPby an order passed bythisTribunal dated 5thJune,2024. (ii) The IRP invited claims in terms of the Code, CoC was constituted of thefollowing creditors: Sl. Name oftheCreditors Amountof claim Voting

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Nos. admitted (in Rs.) Right 1. Indian Bank (Secured) 7,50,01,366.65 91.34% 2. Mr.Aryan Kumar(Unsecured) 71,12,103.00 8.66% (iii) The Resolution Professional was appointed on 20th July, 2024, meanwhile, a Form G was published on 3rd August, 2024 but no ExpressionofInterest was received. (iv) Meanwhile, the Operational Creditor and the Corporate Debtor made efforts towards mutual agreement and after several rounds of talks, they finally entered into a settlement agreement dated 17th January, 2025,interalia, agreeing to thefollowings: (i) The Corporate Debtor agreed and acknowledged its liability of a sum of USD 2,11,680/-. The Corporate Debtor has agreed and undertaken to make payment of a sum of USD 168,000/-as full and final settlement to the Operational Creditor or in favour of original supplier namely, Silkroad C & T in 4 instalments of USD 42,000/- to bring an amicable closure to the instantmatter. (ii) The First instalment shall be paid by 15th February, 2025 and the remaining three instalments are to be paid on or before 30thSeptember 2025. (iii) Upon part payment of USD 21,000 out of the First instalment of USD 42,000/- in favour of the original supplier namely Silkroad C & T or the operational creditor, the operational creditor shall give consent for withdrawal of the CIRP proceedings as initiated against the corporate debtor under IBC bearing CP(IB) No.40/KB.2022. (v) At the 8th CoC meeting held on 30th January,2025, the followings were discussed and deliberated upon– (i) Remittance of USD 42,000 will be processed and sent to the Operational Creditor at theearliest. (ii) On receipt of confirmation of remittance, Operational Creditor willprovidetherequired FormFAforwithdrawal.

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(iii) After voting for withdrawal by CoC with requisite majority, RPwillarrange for filing ofthewithdrawal application. (vi) That after due deliberations the following resolution was passed by the CoCwith 91.34per cent ofvotes: “RESOLVED THAT the CoC considered the settlement between M/s. Korea Trade Insurance Corporation (Ksure) represented by Mr. Abhishek Aggarwal and M/s. Ado Additives MFG Private Limited represented by Mr. Sanjib Parial, suspended director ofthe company and thecommittee unanimously decided in favour of the settlement and authorised theRPto move necessary applicationonbehalf of the applicant before the Adjudicating Authority to seek withdrawal of the application filed by the operational creditor under Section 9.” c. Learned Counsel appearing on behalf of the Resolution Professional submits that after receipt of the e-mail dated 17th February, 2025 from the Operational Creditorforwarding theForm FAto theResolution Professional, the said Form FAwas placed before theCommitteeofCreditors for approval. d. The Committee of Creditors in its 9th CoC meeting dated 18th February, 2025 with 91.34 per cent of voting shares approved the withdrawal of CIRP proceedings and passed necessary resolution to that effect. The followings are discussed and deliberated upon– (i) Mr. Sanjib Parial, Suspended Director of Corporate Debtor had apprised the members that remittance of USD 42,000/-has been directly remitted to original Supplier namely, Silkroad C & Tas per the terms of settlement agreement dated 17.01.2025. (ii) Mr. Abhishek Aggarwal, representative of Operational Creditor confirmed the receipt of USD 42,000/-. He further informed that Form FA dated 10.02.2024 as per regulation 30A of IBC 2016 has been provided to the RP on 17.02.2025 which is required for filing an application for withdrawal of Corporate Insolvency Resolution Process before the Hon'ble AdjudicatingAuthority.

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(iii) Mr. Basant Kumar Mishra, representative of Financial Creditor/Indian Bank having 91.34% voting shares ratified the settlement agreement signed between theparties. e. In the aforesaid backdrop, the present application has been preferred to seek recall of the order dated 5th June, 2024 and withdrawal of the C.P. (IB)/40(KB)2022. f. It was submitted in course of hearing that the sole Creditor Bank being Indian Bank having 91.34 per cent has itselfvoted in favour of the withdrawal of C.P. (IB)/40(KB)2022 and, therefore, the proposal to withdraw the C.P. (IB)/40(KB)2022 being not objected to at any quarters, deserves to be allowed. g. We have heard the learned Counsel appearing on behalf of the Resolution Professional and considered thelegal provisions. h. Rule 8 of the Insolvency and Bankruptcy(Application to Adjudicating Authority) Rules 2016reads as under: “The Adjudicating Authority may permit withdrawal of the application made under rules 4,6 or 7, as the case may be, on a request made by the applicantbeforeits admission.” i. Section 12A was inserted by the Second Amendment in IBC on the recommendation of the Insolvency Law Committee Report of 2018 which is apparently to provide facility to withdraw application made under Sections 7,9 or 10 on settlement even if, CIRP has been initiated. Section 12A reads as under: “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 thecommittee of creditors,in such amanner as maybespecified.” j. Regulation 30Aof the CIRPRegulation, 2016 amended in 2019, provides the procedure for withdrawal of an application. Thus, the said regulation explicitlylays down that: “(1) An application for withdrawal under Section 12A may be made to theAdjudicatingAuthority- (a) Before the constitution of the committee, by the applicant through theinterimresolution professional;

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(b) After the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as thecase maybe: 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-I)accompaniedbyabankguarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the applicationunderclause(a)ofsub-regulation(1);or (b) towards estimatedexpenses incurredforpurposesofclauses(aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause(b)ofsub-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 (a) of sub-regulation (1), the committee shall consider the application, within seven days of its receipt (5) Where an 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 suchapproval. (6)TheAdjudicatingAuthoritymay,byorder,approvetheapplicationsubmitted undersub-regulation(3)or(5). (7) Where the application is approved under sub-regulation 96), the applicant shall deposit an amount, towards the actual expenses incurred for the purposesreferredtoinclause(a) orclause(b) of sub-regulation(2)tillthe date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be,withinthreedaysofsuchapproval,inthebankaccountofthecorporate debtor, failing which the bank guarantee received under sub-regulation (2)

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shall be invoked, without prejudice to any other action permissible against theapplicantundertheCode.” k. The Hon’ble Supreme Court of India in Arun Kumar Jagatramka Vs. Jindal Steel and Power Ltd. & Anr. (2021) ibclaw.in 46SC has clearly indicated that: “Section 12A is not intended to be a culmination of the resolution process.” Further the Hon’ble Court has held that “such withdrawal leads to a statusqua antein respect of theliability ofthe corporatedebtor.”and thus, it has to be distinguished both from a resolution plan which is approved under Section 31 and a scheme which is sanctioned under Section 230 of theAct of2013. l. Thus, while Rule 8 of the Adjudicating Authority Rules contemplates a withdrawal before admission, Section 12A deals with withdrawal of an application which has been admitted under Sections 7, 9 and 10 with an approval of 90 per cent voting shares of the CoC and Regulation 30A envisages fourstages when an application underRule12Acand bemade. n. We are mindful of the applicability of Rule 11 of the National Company Law TribunalRules which reads as under: “Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse oftheprocess ofthe Tribunal.” o. The Hon'ble Supreme Court in Vallal RCK Vs. M/s. Siva Industries and Holdings Ltd. and Others (2022) ibclaw.in 63 SC reiterated that in Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors. [2019] ibclaw.in 03 SC has found that if the CoC arbitrarily rejects a just settlement and/or withdrawal claim, the learned NCLT and thereafter the learned NCLAT can alwaysset asidesuchdecision under theprovisions ofthe IBC. p. Further, the Hon'ble Court held that when 90% and more of the creditors, in theirwisdom after duedeliberations, find that itwill beintheinterest ofall the stakeholders to permit settlement and withdraw CIRP, in our view, the adjudicating authority or the appellate authority cannot sit in an appeal over thecommercial wisdom ofCoC.

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q. TheHon'ble SupremeCourt in Ebix SingaporePvt. Ltd. Vs. CoC ofEducomp Solutions Ltd. &Anr. (2021) ibclaw.in 153 SC having observed that since the aim of the statute is to preserve the interests of the corporate debtor and the CoC, recognized that settlements between the corporate debtor and the CoC may bein thebest interests ofall stakeholders sinceinsolvency is averted. r. In the aforesaid backdrop, we find no impediment in allowing the withdrawal oftheCP. s. Accordingly, we allow the application and dismiss C.P. (IB)/40(KB)2022 as withdrawn. t. The, C.P.(IB)/40(KB)2022 thus,stands disposed ofwith all connected IAs. u. With the withdrawal the RPstands discharged, the withdrawal leads to a status quoantein respect ofthe liabilities oftheCorporate Debtor.

MadhuSinha Bidisha Banerjee Member (Technical) Member(Judicial)

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