Allowed

In the matter of Calvin Associates Private Limited [I.a 1839-2023 in C.P. (IB)-764(MB)2020]

NCLT12 May 2023I.A 1839-2023 in C.P. (IB)-764(MB)2020

Case brief

AI extract

What is this about?

NCLT Mumbai allowed withdrawal of CIRP after the Corporate Debtor settled dues with the Operational Creditor. The court relied on Supreme Court precedent allowing such withdrawals before Committee of Creditors formation under Rule 11 IBC Rules.

What did the court decide?

CIRP withdrawn; IRP discharged and charges handed back to Board; Operational Creditor directed to pay fees and file compliance affidavit; Corporate process closed.

In the matter of Calvin Associates Private Limited [I.a… — Insolvency and Bankruptcy | NCLT (2023)

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NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH COURT – IV

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I.A 1839/2023

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IN C.P. (IB)/764(MB)2020

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CORAM:

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SHRI PRABHAT KUMAR MEMBER (Technical)

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SHRI KULDIP KUMAR KAREER MEMBER (Judicial)

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ORDER SHEET OF THE HEARING HELD ON 12.05.2023

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Name of the Parties: Carestream Health India Private Limited VS

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Calvin Associates Private Limited

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SECTION 9 OF INSOLVENCY AND BANKRUPTCY CODE, 2016 RULE 11 OF NCLT RULES 2016

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ORDER

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The Court is convened through Video Conference.

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Mr. Sean Wasoodew, Ld. Counsel for the Applicant present. Mr. Rakesh Bothra, Interim Resolution Professional (IRP) present in person. Mr. Abhishek Tilak, Ld. Counsel for Operational Creditor present.

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This is an Application filed on 03.05.2023 by Mr. Kausshal Bagadia, Former Director of the Corporate Debtor u/s 12A of the Code r/w Rule 11 of NCLT Rules 2016 seeking prayer from this Bench to recall the admission order dated 28.04.2023 and withdrawal of Company Petition.

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Ld. Counsel for the Applicant submits that after the initiation of CIRP against the Corporate Debtor, the Corporate Debtor have paid the entire dues and settled its claim with the Operational Creditor. Ld. Counsel for the Operational Creditor confirms the submission of the Applicant.

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Ld. IRP present and submits that the Form-A was published, however, the CoC has not been constituted.

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The Hon’ble Supreme Court in Swiss Ribbons Private Limited & Anr. Versus Union of India & Ors., held that:

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“52 It is clear that once the Code gets triggered by admission of a creditor‘s petition under Sections 7 to 9, the proceeding that is before the Adjudicating Authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case.”

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In view of the aforesaid, this Bench finds since the conditions for withdrawal for CIRP u/s 12(A) and regulation 30(A) of Insolvency and Bankruptcy Code Board of India (Insolvency Process for Corporate Persons) Regulations 2016 have been complete, this Bench has no objection for withdrawal of CIRP.

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Accordingly, the Corporate Debtor is brought out from the rigours of CIRP and the IRP is directed to handover the charge of the Assets and Affairs of the Corporate Debtor back to the Suspended Members of the Board of Directors. RP is discharged from his duties.

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The Operational Creditor is directed to pay the fees of the IRP expenses incurred against publication of Form and legal charges upto 4^th May and file affidavit of compliance before this Tribunal.

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