Allowed

In the matter of Srichaitanya Students Facility Management Private Limited [Ia 2879-2023 in C.P. (IB)-788(MB)2021]

NCLT11 Jul 2023IA 2879-2023 in C.P. (IB)-788(MB)2021

Case brief

AI extract

What is this about?

The Tribunal allowed an application filed by the Interim Resolution Professional seeking withdrawal of Corporate Insolvency Resolution Process (CIRP) and dismissal of the Company Petition. The court found that since the Committee of Creditors was not constituted and the operational creditor had settled dues, conditions for withdrawal under the IBC were met. The IRP was discharged, and charge of as

What did the court decide?

Withdrawal of CIRP allowed; charges of assets and affairs handed over to Suspended Members of Board of Directors; IRP discharged from duties; Company Petition dismissed.

In the matter of Srichaitanya Students Facility… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH

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COURT – IV

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IA 2879/2023 IN C.P. (IB)/788(MB)2021

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CORAM:

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SHRI PRABHAT KUMAR SHRI KISHORE VEMULAPALLI MEMBER (Technical) MEMBER (Judicial)

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ORDER SHEET OF THE HEARING HELD ON 11.07.2023

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NAME OF THE PARTIES: K Rama Mohan Rao

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Srichaitanya Students Facility Management Private Limited

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SECTION: 9, 12A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016

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O R D E R

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Ms. Sandhya Rani, Ld. Counsel for the Petitioner present.

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IA-2879/2023: has been filed by the Interim Resolution Professional (IRP) under Section 12A of the Code seeking withdrawal of CIRP as well as Company Petition C.P.(IB)/788(MB)2021.

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The Applicant submits that the Company Petition was admitted by this Bench and CIRP was initiated vide order dated 18.05.2023. Pursuant to the admission order was passed, Interim Resolution Professional published Form-A on 22.05.2023 for inviting claims and the last date of submission of claims is 05.06.2023.

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After commencement of CIRP, the Operational Creditor has been paid entire amount in full and final settlement with the Corporate Debtor. On account of stay on constitution of CoC by Hon’ble NCLAT, the CoC has

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SVR

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not been constituted. Therefore, we approached before this Bench by this Application to allow the withdrawal of Company Petition.

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The Resolution Professional has also filed form FA for withdrawal of Company Petition.

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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

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SVR

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Persons) Regulations 2016 are met, this Bench is inclined to allow withdrawal of CIRP.

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Accordingly, the Corporate Debtor is brought out from the rigors of CIRP and the RP 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. IRP is discharged from his duties. The parties shall pay the dues of the IRP, if not paid so far.

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