In the matter of Silver Jubilee Motors Limited
- CitationIA(I.B.C)- 508(MB)2024 in C.P. (IB)-354(MB)2022
Ratio decidendi
The rule this decision rests on
Where a financial creditor has, within the period permitted, filed Form FA seeking withdrawal of a corporate insolvency resolution process application on the basis of a settlement under which the defaulted dues have been paid and the account regularised, and where the applicant is the same person duly authorised to file the application, the Tribunal may allow withdrawal under Section 12A of the Insolvency and Bankruptcy Code, 2016 read with Regulation 30A of the CIRP Regulations, provided the requirements of Regulation 30A are satisfied, namely that the withdrawal is filed within the prescribed time after receipt of the admission order and that no amount remains payable towards insolvency resolution process costs; no bank guarantee is required where the initial expenses deposited with the Interim Resolution Professional have been accounted for and nothing further is payable. Where the withdrawal application is filed before the Committee of Creditors has been constituted, and the Form FA and the application are made within the time prescribed under Regulation 30A(3), the Tribunal may exercise its inherent power under Rule 11 of the NCLT Rules to permit withdrawal of the application, consequent upon which the moratorium under Section 14 ceases to operate from the date of the order and the Interim Resolution Professional must release the corporate debtor's assets and records to its directors and return any unspent balance of the initial deposit to the financial creditor.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
ORDER IA(I.B.C)/508(MB)2024 1. This IA has been filed by the applicant/FC in CP(IB)/354(MB)/2022 through the Interim Resolution Professional (IRP) for withdrawal of the CP, under Section 12A of the Insolvency and Bankruptcy Code, 2016 (IBC) r/w Regulation 30A(1)(a) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and Rule 11 of the National Company Law Tribunal Rules, 2016 (NCLT Rules). Heard the arguments of Ld. Counsel for the IRP.
2. We had admitted the CP for insolvency commencement of the CD vide order dated 12.01.2024. It has been stated by the IRP that the parties have settled their dispute to the effect that the over-dues subsisting in the loan account of the CD with the FC have been regularised and taken out of Non-Performing Account status by paying Rs. 1,67,98,963/. The FC has issued Account Regularisation Confirmation Letter dated 27.01.2024 to the CD, which is Annexure-6 to this IA. Further, the FC has filed Form FA dated 27.01.2024 for withdrawal of the CP as Annexure-7. This IA has been filed on the 18th day of insolvency commencement date, being 12.01.2024, and 15th day of the date of receipt of the admission order.
3. The IRP has submitted that public announcement was made under Section 15 of the IBC on 18.01.2024, fixing the last date of receipt of claims as 29.01.2024. While the claims as received from the creditors were under the stage of verification, Form FA has been submitted by the FC on 27.01.2024, and thus, the Committee of Creditors has not been constituted. It is also submitted by the IRP that this IA has been filed on 30.01.2024, i.e., within three days from the date of receipt of Form FA as required under Regulation 30A(3) of the CIRP Regulations.
4. We have perused the documents attached to the IA and heard the Ld. Counsel for the IRP. It is clarified by the Ld. Counsel that this IA has been filed by the same National Legal Manager of the FC, who was duly authorised to file the CP and, hence, he is the applicant within the meaning of Section 2(1)(a) of the CIRP Regulations competent to submit
Form FA on behalf of the FC. Further, no bank guarantee as mentioned in terms of Regulation 30A(2)(a) of the CIRP Regulations r/w paragraph 3 of Form FA is required in the present IA as the FC had already provided five lakh rupees to the IRP for meeting the initial expenses, as per the admission order dated 12.01.2024 itself, and that the IRP has filed his statement of expenditure accounting for his professional fees and other expenses. Besides this, no other amount remains payable towards insolvency resolution process costs within the meaning of Section 5(13) of the IBC.
5. Having considered the spirit of the judgment of the Hon’ble Supreme Court in Civil (A) No. 2241/2023 in Abhishek Singh Vs. Huhtamaki PPL Ltd, & Ors., and upon hearing the Ld. Counsel for IRP, we are satisfied that Form FA submitted by the FC is in compliance of all legal formalities under the provisions of the IBC and the CIRP Regulations. Therefore, we hold that this is a fit case to exercise our inherent powers under Rule 11 of the NCLT Rules and to allow withdrawal of the CP. In the result, this IA is allowed and the CP is allowed to be withdrawn.
6. As from today, the CD is free from the rigour of CIRP ordered on 12.01.2024 and the moratorium under Section 14 of the IBC shall cease to operate as on the date of this order. The IRP is directed to release and handover all the assets, documents, records and things taken control of by him in physical or electronic format to the suspended directors of the CD forthwith.
7. The IRP is directed to return the balance amount of Rs. 55704/-, out of the five lakh rupees deposited with him, to the FC forthwith. CP(IB)/354(MB)/2022 stands disposed of as withdrawn.
8. Ordered accordingly. Sd/- Sd/- MADHU SINHA K. R. SAJI KUMAR MEMBER (TECHNICAL) MEMBER (JUDICIAL) //SKS//
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free