CIRP Withdrawal Cannot Be Allowed Unless Application Is Filed By Applicant Who Initiates Section 7 Application: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan and Barun Mitra has held that CIRP cannot be withdrawn under section 12A read with Regulation 30A unless application for withdrawal is filed by the applicant who initiated the CIRP. Based on the above, the tribunal observed that “we are of the view that Adjudicating Authority did not commit any error in rejecting the prayer of the Appellant in IA No.2241 of 2024 for recall of the order dated 08.10.2021.” In Glass Trust Company LLC v. BYJU Raveendran the Supreme Court has held that “Regulation 30A provides that in cases where the application for withdrawal is moved before the constitution of the CoC, the IRP shall submit the application to the NCLT on behalf of the applicant within three days of receipt.” “Regulations 30A and deal with the situation where the CoC has already been constituted. They provide that the CoC shall consider the application within seven days of receipt, and subsequently, if the application is approved by the CoC with a ninety-percent voting share, the RP must submit the application with the approval to the NCLT within three days of the approval.” While applying the above ratio to the facts of the present case, it opined that Section 7 Application has been filed by Respondent Nos.6 to 9 and unless an Application is filed by the Applicant, who has initiated Section 7 Application, compliance of Section 12A read with Section 30A, cannot be made. In a case where finding is returned within the meaning of Section 65, the Adjudicating Authority can very well exercise its inherent jurisdiction to close such CIRP proceedings.” The tribunal further noted that IA No.1238 of 2022, in which averments and pleadings have been made within the meaning of Section 65 of the IBC, still pending consideration before the Adjudicating Authority and while hearing the said Application, the Adjudicating Authority directed for stay of voting on the Resolution Plan.