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Judgment
The case is fixed for pronouncement of order. The common order is pronounced in the open court, vide separate sheet.
These two interlocutory applications— IA/1290/NCLT(AHM)2025 & IA/1389/NCLT(AHM)2025 arise from the Corporate Insolvency Resolution Process of Vimla Fuels and Metals Limited, initiated under the Insolvency and Bankruptcy Code, 2016. The proceedings involve multiple stakeholders, including the Interim Resolution Professional, financial creditors, and representatives of the suspended management. This common order addresses both applications comprehensively.
The IA/1290/NCLT(AHM)2025, is filed by Anil Kumar Satyanarayan Agarwal, Interim Resolution Professional (IRP) of Vimla Fuels and Metals Ltd, on 30.10.2025 under section 12A of the IBC, 2016 r/w Regulation 30A of the CIRP Regulations, 2016 and Rule 11 of the NCLT Rules, 2016 for seeking withdrawal of the Corporate Insolvency Resolution Process of the Corporate Debtor with the following prayers: -
a)Allow the present application under Section 12A of the Insolvency and Bankruptcy Code, 2016, and Regulation 30A of the CIRP Regulations, 2016;
b)Take on record and accept the application for withdrawal of Corporate Insolvency Resolution Process as received in Form-FA from the original Applicant, Ms. Vidya Devi Chowdhury (Proprietor of BDHCCI Coal Coke Minerals & Metals Enterprises);
c)Allow and order the closer of the Corporate Insolvency Resolution Process of Vimla Fuels and Metals Ltd;
d)Discharge the office of the Applicant (IRP), Mr. Anil Kumar Satyanarayan Agarwal;
e)Any other consequential reliefs as this Hon'ble Tribunal may deem fit to meet the ends of justice.
The IA/1389/NCLT(AHM)2025, is filed by Prem Agarwal POA holder of Sanjay Kumar Inder Chand Agarwal (Suspended Board of Director of Vimla Fuels and Metals Ltd, on 24.11.2025 under section 60(5)(c) of the IBC, 2016 a/w Section 424 of the Companies Act, 2013 r/w Rule 11 of the NCLT Rules, 2016 for seeking permission from Adjudicating Authority to implead Applicant/SM i.e., Suspended Board of Director as party in IA/1290/NCLT(AHM)2025 in CP(IB) No.211/9(AHM)2025 with the following prayers: -
a)Your lordships may be pleased to allow the present application;
b)Your lordships may be pleased to allow the Applicant to be impleaded and/or to be heard in IA no. 1290 of 2025.
c)Your lordships may be pleased to Allow withdrawal of CIRP process under Section 12A r/w Regulation 30A (1)(a) in the interest of Corporate Debtor;
d)Your lordships may be pleased to declare that the settlement is under Regulation 30A (1)(a) and not clause (B) of CIRP Regulations, 2016;
e)Your lordships may be pleased to grant any other relief or relief as may deem fit in the interest of justice.
Through I.A. No. 1290/NCLT(AHM)2025, the Applicant/IRP has placed the facts in the following manner:
The Corporate Debtor was admitted to Corporate Insolvency Resolution Process on 06.10.2025 in Company Petition IB No. 211 of 2025 under section 9 of the Code filed by the operational creditor Vidya Devi Chowdhury. Copy of the admission order dated 06.10.2025 is attached as Annexure A.
Anil Kumar Satyanarayan Agarwal was appointed as Interim Resolution Professional, and a public announcement was issued on 09.10.2025 in Financial Express English and Gujarati editions. The last date for claim submission was 20.10.2025, and in terms of Regulation 17 of the CIRP Regulations, 2016 the due date for constitution of Committee of Creditors was 29.10.2025. Copy of the Public Announcement is attached as Annexure B.
The Operational Creditor intimated the Applicant/IRP about Settlement-cum-Memorandum of Understanding of Rs.1,18,46,826/- reached with the Suspended Director on 28.10.2025 (agreeing to pay Rs.61,00,000/- within one working day from the date of order permitting withdrawal of CIRP Us 12A, & balance amount of Rs.57,46,826/-to be paid on mutually agreed Terms with in 1 year upon release from judicial custody).
The Operational Creditor submitted Form-FA for withdrawal of the Corporate Insolvency Resolution Process. This was followed by submission of notarized Form-FA on 27.10.2025. Copy of the Form FA dated 28.10.2025 and copy of Settlement-cum-MOU dated 28.10.2025 submitted by the Operational Creditor are attached as Annexure C Colly.
The Form-FA was submitted before constitution of the Committee of Creditors in terms of section 12A of the Code read with Regulation 30A(1)(a) of the CIRP Regulations, 2016. Copy of correspondences exchanged between the Applicant and the Operational Creditor are annexed as Annexure-D Colly.
The actual CIRP expenses until the date of filing is Rs.4,78,062. The Operational Creditor has deposited Rs.5,00,000. The expected CIRP cost till closure is Rs.13,94,062. The Operational Creditor has undertaken to make payment or provide a bank guarantee for the balance amount.
Thereafter, Committee of Creditors was constituted on 29.10.2025 comprising four Financial Creditors with total admitted claims around Rs.61,41,67,420/-. Bank of Maharashtra holds 26.49 percent voting share, State Bank of India 47.44 percent, Indian Overseas Bank 16.28 percent, and Mukund Security and Investment Limited 9.79 percent.
The Hon'ble NCLAT in Company Appeal AT Ins No. 1628 of 2025 disposed of the Company Appeal on 04.11.2025, directing this Tribunal to decide the section 12A application expeditiously. It allowed Committee of Creditors meetings only for section 12A purposes under regulation 30A.
The first Committee of Creditors meeting occurred on 05.11.2025, where the Interim Resolution Professional informed about the filing. Three CoC members holding 52.56 percent voting rights orally favoured continuation of CIRP of the Corporate Debtor, while State Bank of India holding 47.44 percent voting rights did not express any view. Further, in pursuance to the said 1st meeting of the CoC, no voting result was obtained. Financial Creditors subsequently filed affidavits opposing the withdrawal.
Since, the IRP convened meeting in terms order on the Hon'ble NCLAT dated 04.11.2025. Hence, on 08.12.2025, this Tribunal directed the Interim Resolution Professional to place voting result of said meeting. Accordingly, voting was held, and all CoC members voted in favour of continuation of CIRP proceedings and against withdrawal, as detailed in the affidavit filed on 11.12.2025.
The Applicant submits that the settlement is reached between the Operational Creditor and the Suspended Director of Corporate Debtor before constitution of CoC. The Operational Creditor has requested for termination of the process. Hence, the continuation of the Corporate Insolvency Resolution Process is no longer warranted.
In view of above-narrated facts, the Applicant has sought to allow the application under section 12A, to accept Form-FA, to discharge the Applicant as Interim Resolution Professional, and to grant other consequential reliefs.
That on issuance of the notice in I.A. No. 1290/NCLT(AHM)2025 to all the Financial Creditors who claim have been admitted by the IRP, the CoC Members/Financial Creditors appeared and filed their respective Replies opposing the I.A. The Brief summary of Replies of the CoC Members/Financial Creditors & Additional Affidavit of IRP in I.A. No. 1290/NCLT(AHM)2025 is as under: -
Bank of Maharashtra filed Preliminary Reply on 17.11.2025 vide Inward No. D-7529, opposing withdrawal inter-alia on the grounds that: -
The proceedings become in rem after admission requiring 90 percent Committee of Creditors approval as required by section 12A despite filing under regulation 30A(1)(a).
Bank of Maharashtra highlights its 26.49 percent voting share in CoC with provisionally admitted claims of Rs.16,26,82,742/-. The reply emphasizes creditor protection under the Code. The opposition is based on statutory framework post-admission. The total claims from four Financial Creditors are as under: -
| Sr. No. | Financial Creditor | Claim Admitted (INR) | Voting Share (%) | Category |
|---|---|---|---|---|
| 1 | State Bank of India | Rs. 29,13,57,691/- | 47.44% | Secured |
| 2 | Bank of Maharashtra | Rs.16,26,82,742/- | 26.49% | Secured* |
| 3 | Indian Overseas Bank | Rs.9,99,99,671/- | 16.28% | Secured* |
| 4 | Mukund Security and Investment Ltd. | Rs. 6,01,27,316/- | 9.79% | Unsecured |
| Total | ₹61,41,67,420/- | 100% |
“Subject to final determination by IRP/RP upon examination of security documentation, CERSAI registrations, and compliance with RBI norms applicable to bill factoring transactions.”
Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 has clarified that even at Stage 2 (pre-CoC constitution), the NCLT must ensure that the interests of all creditors, particularly those who would have constituted the CoC, are adequately protected.
Bank of Maharashtra prefers CIRP continuation for assessment of assets, resolution options, value realization, recovery mechanism, moratorium, equitable treatment, and framework integrity.
Hence, the Bank of Maharashtra has sought the rejection of the withdrawal application filed under section 12A and continuation of the CIRP of Vimla Fuels & Metals Limited.
Mukund Security and Investment Limited filed Reply on 17.11.2025 vide Inward No. D-7625, opposing withdrawal inter-alia on the grounds that: -
- (a) Mukund Security and Investment Limited highlights its holding 9.79 percent voting share in CoC with admitted claims of Rs.6,01,27,316/-, and Suspended Director has no locus for post-admission. It annexes board resolution and Committee of Creditors constitution report. - (b) The Mukund Security raises preliminary objections to maintainability as Committee of Creditors was constituted on 29.10.2025 and Applicant filed Interlocutory Application No.1296 of 2025 for its certification with report annexed as Annexure-R/2. - (c) The present Application filed on 29.10.2025 and registered on 30.10.2025 under Section 12A of Insolvency and Bankruptcy Code 2016 and Regulation 30A of CIRP Regulations falls under Regulation 30A(1)(b) after CoC constitution.
Mukund Security made reliance on NCLAT Bengaluru Bench order of Pankaj Srivastava Vs BCCI IA 837 of 2024 NCLT Bengaluru [I.A. 837 of 2024 in C.P.(IB) 149/BB/2023] wherein held that the date on which the Section 12A Application is acted upon is the determinative date for deciding the applicability of Regulation 30A and to decide upon the Application for withdrawal.
Further, the Hon'ble NCLAT, Chennai Bench has upheld and affirmed the said principle in the case of 'Riju Ravindran Suspended Director & Promoter of Think and Learn Private Limited Vs. Pankaj Srivastava /RP of Think and Learn Private Limited [Company Appeal (A1)(CH)(INS) No. 89 of 2025].
Withdrawal based on settlement with one operational creditor prejudices other creditors' rights as held by Hon'ble Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 as held that once the CIRP is initiated against the Corporate Debtor, the said proceedings become proceedings in rem and are no longer the perverse of only the applicant creditor and the corporate debtor and even creditors who were not the original applicants, become necessary stakeholders.
In view of above narrated facts, the Mukund Security has sought rejection of the Application as contrary to Insolvency and Bankruptcy Code 2016 and CIRP Regulations.
Indian Overseas Bank filed Reply on 18.11.2025 vide Inward No. D-7644, opposing withdrawal, inter-alia on the grounds that: -
Indian Overseas Bank highlights its holding 16.28 percent voting share, with admitted claims of Rs.9,99,99,671/-. It states that settlement ignores financial creditors' interests. The reply details Committee of Creditors meeting restrictions as per NCLAT order.
Section 12A permits withdrawal of an application admitted under Sections 7, 9 or 10 "only on an application made by the applicant with the approval of ninety percent voting share of the committee of creditors" and in such manner as may be specified.
It relies on Supreme Court judgment of Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors., (2019) ibclaw.in 03 SC wherein it has extracted Section 12A and held, in no uncertain terms, that post-admission proceedings are in rem and that to halt such collective proceedings, ninety percent of creditors must agree.
It relies on Brilliant Alloys Pvt. Ltd. v. Mr. S. Rajagopal & Ors., (2018) ibclaw.in 35 SC wherein the Supreme Court clarified that Regulation 30A's proiso must be read harmoniously with Section 12A as clarifying that substantive requirement cannot be diluted.
It relies on Innoventive Industries Ltd. v. ICICI Bank and Anr., (2017) ibclaw.in 02 SC wherein the Supreme Court holds IBC process creditor driven creating rights in rem, time-bound and once triggered, creates rights in rem affecting all stakeholders. This principle underpins the collective architecture of the Code and the inadmissibility of private settlements that prejudice the body of creditors.
Hon'ble Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 has, most recently consolidated the law that withdrawal and settlement must strictly adhere to the four permissible stages and procedures under Rule 8 of the NCLT Rules, Section 12A and Regulation 30A; that Rule 11 "inherent powers" cannot be used to bypass this code-based framework; and that the rights of other creditors created upon admission cannot be defeated by bilateral arrangements.
The present withdrawal does not satisfy 90% approval with IoB opposition as per IRP minutes of 05.11.2025 annexed as Annexure E and bilateral settlement prejudices financial creditors aggregating Rs. 61,41,67,420/-.
The composition of the CoC, based on the provisionally admitted claims, is tabulated hereinbelow:
| Sr. No. | Financial Creditor | Claim Admitted (₹) | Voting Share | Category |
|---|---|---|---|---|
| 1. | State Bank of India | 29,13,57,691 | 47.44% | Secured |
| 2. | Bank of Maharashtra | 16,26,82,742 | 26.49% | Secured |
| 3. | Indian Overseas Bank | 9,99,99,671 | 16.28% | Secured |
| 4. | Mukund Security and Investment Ltd. | 6,01,27,316 | 9.79% | Unsecured |
| Total | 61,41,67,420 | 100% |
Subject to final determination by the IRP/RP upon verification of security documents, CERSAI registrations, and compliance with RBI norms applicable to bill factoring transactions.
The opposition stresses collective creditor resolution process. The IoB has sought rejection of IA 1290 of 2025 and direction for continuation of CIRP reserving liberty for settlement per Section 12A and Regulation 30A.
State Bank of India filed Reply on 20.11.2025 vide Inward No. D-7757, opposing withdrawal, inter-alia on the grounds that: -
State Bank of India is holding 47.44 percent voting share in CoC with admitted claims of Rs.29,13,57,691/- and the claim of Rs.16,14,056/- is under verification. It notes abstention in first meeting but later voted against withdrawal of of the corporate insolvency resolution process.
It is submitted that the Corporate Debtor has not submitted any compromise or settlement proposal to State Bank of India, and substantial outstanding dues continue to remain unpaid as on date.
It argues against early termination without full approval. The facts cover from admission to voting results.
It has also sought the denial or rejection of the withdrawal of the corporate insolvency resolution process initiated against M/s Vimla Fuels and Metals Ltd. and continuation of the said process.
Interim Resolution Professional also filed Compliance Affidavit on 11.12.2025 with voting emails and sheets as annexures A and B. All members voted against, confirming 100 percent opposition. Total admitted claims of financial creditors aggregate to Rs.61,41,67,420 including State Bank of India Rs.29,13,57,691 at 47.44%, Indian Overseas Bank Rs.9,99,99,671 at 16.28%, and Mukund Security and Investment Limited Rs.6,01,27,316 at 9.79%. The affidavit supports considering stakeholder views.
Through I.A. No. 1389/NCLT(AHM)2025, the Applicant/Suspended Director has placed the facts in the following manner: -: -
The Applicant is Prem Agarwal, holding power for Sanjay Kumar Inder Chand Agarwal, suspended director. This application seeks impleadment of the Applicant, representing suspended management, in Interlocutory Application No. 1290 of 2025.
The application details the timeline from admission of Corporate Debtor on 06.10.2025 to the orders of National Company Law Appellate Tribunal. The Applicant herein filed an appeal bearing CA(AT)(Ins) no. 1628 of 2025 before Hon'ble NCLAT, New Delhi on 17.10.2025 against the impugned CIRP order dated 06.10.2025.
That the Hon'ble Appellate Tribunal vide order dated 27.10.2025 recorded the fact that settlement proposal has been proposed by Applicant and it was also accepted by the Original Operational Creditor.
The Applicant claims that Operational Creditor issued Form - FA on 27.10.2025 to the Respondent IRP for Withdrawal of Application admitted for CIRP of Vimla Fuels and Metals Limited in view of Settlement Agreement executed between Applicant and Operational Creditor which was prior to Committee of Creditors constitution on 29.10.2025.
Thereafter, on 29.10.2025, Respondent IRP preferred IA No.1290/NCLT(AHM)/2025 seeking withdrawal of the CIRP of the Corporate Debtor under Section 12A of the IB Code, 2016 read with Regulation 30A(1)(a) of the CIRP Regulations, 2016. The said provision was duly invoked as the Committee of Creditors had not yet been constituted and the Applicant had already approached the Hon'ble NCLAT.
However, Respondent/IRP went ahead and constituted CoC to defeat the purpose of Section 12A r/w Regulation 30A(1)(a) constituted CoC and called for a meeting on 05.11.2025. The Applicant states that constituting the Committee defeats the purpose of regulation 30A(1)(a) for pre-Committee withdrawals.
It asserts that no Committee of Creditors approval is needed under regulation 30A(1)(a). The facts emphasize the haste in Committee of Creditors formation post-Form FA. It prays for declaration of Committee of Creditors as illegal to prioritize the settlement.
The Applicant contends that Form FA issuance locks the withdrawal mode without Committee of Creditors involvement. The annexures and precedents support the legal arguments against Committee of Creditors constitution. The facts are presented to show interim steps as contrary to regulations.
The Applicant states that Suspended Director is necessary party for effective adjudication U/s 12A of IBC, 2016. It claims prejudice if not impleaded.
In I.A. No. 1389/NCLT(AHM)2025, the Respondent/IRP filed its Reply on 08.12.2025 vide Inward No. D-8222. The Brief summary of the Reply of Respondent/IRP is as under:
The Interim Resolution Professional denied all allegations in the application in toto. The application by Prem Agarwal lacks valid authority as the power of attorney dated 14.03.2025 predates admission and authorizes actions only before NCLAT. The IRP submitted that the application may not be considered on merits without valid post-admission authority.
Pursuant to admission order dated 06.10.2025, the IRP issued public announcement on 09.10.2025 with last date for claims as 20.10.2025 and CoC constitution due on 29.10.2025 under Regulation 17. Suspended Director filed appeal No. 1628/2025 on 16.10.2025 before NCLAT which deferred to 04.11.2025 without stay on CIRP or CoC. On 27.10.2025, operational creditor informed IRP of in-principal settlement and submitted Form FA.
On 28.10.2025, notarized Form FA dated 27.10.2025 and settlement MOU were submitted stating corporate debtor would pay Rs. 61,00,000 upon withdrawal order and balance Rs. 57,46,826 later. Form FA was received before CoC deadline so IRP filed IA NO.1290/NCLT(AHM)/2025 on 29.10.2025 under Section 12A read with Regulation 30A(1)(a) without CoC approval. The IRP constituted CoC on 29.10.2025 to comply with Regulation 17 and filed IA 1296/2025 which was recorded on 04.11.2025.
In IA NO.1290/NCLT(AHM)/2025, IRP did not join financial creditors but NCLT on 31.10.2025 issued notices to them per ratio in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024. On 04.11.2025 before NCLAT, applicant informed of Form FA, IA NO.1290/NCLT(AHM)/2025, notices and CoC constitution which NCLAT noted without challenge. Suspended Director knew timelines but sought no stay and now challenges CoC as financial creditors oppose withdrawal.
Even without CoC, NCLT can consider views of stakeholders including financial creditors before allowing Section 12A filed pre-CoC. Reliance is placed on FAQs released by IBBI annexed as Annexure R1 which state IRP must continue CIRP including CoC constitution despite pending Section 12A. The FAQs clarify IRP duties continue until approval by adjudicating authority.
CoC constitution on 29.10.2025 was mandatory and non-adherence based on unapproved IA would breach duty. In IA NO.1290/NCLT(AHM)/2025, IRP sought interim stay on further CIRP actions pending disposal. No irregularity occurred in CoC constitution and assertion of defeating Section 12A with Regulation 30A(1)(a) contradicts Suspended Director conduct before NCLAT and legal provisions.
In view of above narrated facts, the IRP has sought rejection of the application challenging CoC constitution and authority while having no objection to impleading if valid and stating other prayers as non-est.
The Brief summary of Affidavit -in Rejoinder of the Applicant/Suspended Director to the Reply of Respondent/IRP, filed on 11.12.2025 vide Inward No. D-8417 & additional Affidavit of the Applicant/Suspended Director filed on 12.12.2025 vide Inward No. D-8456 in I.A. No. 1389/NCLT(AHM)2025 is as under: -
the Applicant/Suspended Director, in Rejoinder against Interim Resolution Professional reply, asserts that defect is curable by filing fresh Power of Attorney. It argues Suspended Director as necessary party for adjudication. Form FA issuance on 27.10.2025 triggers withdrawal by law. Constitution of Committee of Creditors post-Form FA is illegal. Reliance on regulation 30A(1)(a) for no approval need. The rejoinder prays to reject objections and grant reliefs.
The Applicant/SM denied statements in the reply of the IRP that contradict his position. The IRP raised objection on discrepancy in authority letter which is rectifiable under law. The Applicant undertook to file revised authority letter. The Applicant is nephew of Sanjay Agarwal who is suspended director of corporate debtor.
The Applicant/SM is necessary party in withdrawal under Section 12A of IB Code 2016 as per Order I Rule 10(2) of Code of Civil Procedure 1908. Supreme Court held that party is necessary if rights are affected and decree cannot pass in absence. Exclusion violates natural justice.
In pre CoC stage decision rests with operational creditor and suspended management as per Swiss Ribbons Pvt Ltd v Union of India (2019) 4 SCC 17. Financial creditors have no locus before CoC constitution. IRP constituted CoC on 29.10.2025 despite Form FA issued on 27.10.2025.
Applicant/SM relied on judgment of NCLT, Mumbai Bench of Purusottam Behera (IRP) v Amluckie Investment Company Ltd in IA(IBC) No 67/2025 in CP(IB) No 834/MB/2020. It held directors are stakeholders in Section 12A application and need to be heard.
Absence of Applicant/SM in Section 12A application makes proceedings defective. IRP breached Regulation 30A(1)(a) of CIRP Regulations 2016 by not disclosing Form FA. Continuation of CIRP after Form FA is jurisdictional defect.
IRP showed bias by constituting CoC and filing IA 1290 of 2025 without parties. The Applicant relied on Judgment of Supreme Court of Abhishek Singh v Huhtamaki PPL Ltd & Anr in SLP (Civil) No 6452 of 2021 wherein held NCLT must allow withdrawal pre CoC if settled. The Applicant also relied on Judgment of Supreme Court of GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 with Special Leave Petition (C) No 21023 of 2024 which affirmed legal framework.
In view of above narrated facts the Applicant/SM has sought to reject objections of IRP declare Applicant necessary party hold CoC constitution illegal direct withdrawal of CIRP under Section 12A read with Regulation 30A(1)(a) and consider disciplinary reference against IRP.
The Applicant/Suspended Director filed Additional affidavit filed on 11.12.2025 to place Power of Attorney dated 10.12.2025 on record to cure authority defect. It states the defect is rectifiable and Applicant is competent. Annexure A is the Power of Attorney executed by Sanjay Kumar Inder Chand Agarwal. It states no prejudice is caused to parties.
The Brief Summary of Written Submissions by Applicant/IRP on 17.12.2025 vide Inward No. D-8582 in I.A. No. 1290/NCLT(AHM)2025 is as under: -.
Interim Resolution Professional filed written submissions detailing timeline from section 9 admission on 06.10.2025 to voting on 11.12.2025.
It states that an application under section 9 of the Insolvency and Bankruptcy Code, 2016 bearing CP(IB) No. 211/9/AHM/2025 was filed by the Operational Creditor Ms. Vidya Devi Chowdhury against Vimla Fuels & Metals Ltd. This application came to be admitted by the Tribunal vide order dated 06.10.2025. The Tribunal appointed Anil Kumar Satyanarayan Agarwal as the Interim Resolution Professional. The Interim Resolution Professional issued a public announcement on 09.10.2025 in Financial Express English and Gujarati editions calling upon claimants to submit claims by 20.10.2025.
The due date for constitution of the Committee of Creditors was 29.10.2025 in terms of Regulation 17 of the CIRP Regulations. The Suspended Director filed an appeal bearing CA(AT)(Ins) No. 1628 of 2025 before the NCLAT which was listed on 27.10.2025. The Suspended Director informed about submission of settlement proposal to the Original Operational Creditor. On 27.10.2025 the Original Operational Creditor intimated the Interim Resolution Professional about in-principle amicable settlement and submitted Form FA for withdrawal of CIRP.
This was followed by submission of notarized Form FA and Settlement-cum-Memorandum of Understanding dated 28.10.2025 on 28.10.2025. The Memorandum of Understanding requires payment of Rs. 61,00,000 within one working day from allowing application under Section 12A and balance Rs. 57,46,826 subsequently in mutually agreed manner. Actual CIRP expenses until filing were Rs. 4,78,062 with Rs. 5,00,000 deposited by Original Operational Creditor. Expected CIRP cost till closure is Rs. 13,94,062 for which Original Operational Creditor undertook to pay or provide Bank Guarantee.
Form FA was submitted before constitution of Committee of Creditors so Interim Resolution Professional filed application under Regulation 30A(1)(a) on 29.10.2025 without seeking approval. There was no stay by NCLAT so Interim Resolution Professional Constituted Committee of Creditors on 29.10.2025 recorded vide order dated 04.11.2025 in IA 1296/2025.
Application was listed on 31.10.2025 and Tribunal directed notice to financial creditors. NCLAT disposed appeal on 04.11.2025 recording facts and limiting Committee of Creditors meeting to Section 12A purposes. In meeting on 05.11.2025 members except State Bank of India opined for continuation. Financial creditors filed affidavits opposing. Tribunal directed voting on 08.12.2025 and all members voted against withdrawal vide affidavit dated 11.12.2025.
In view of above-narrated facts, the Applicant has sought consideration of the present application and passage of such orders as the Tribunal deems fit in the interest of justice.
The Brief Summary of Written Submissions filed on 16.12.2025 vide Inward No. D-8621 by Applicant/Suspended Director in I.A. No. 1389/NCLT(AHM)2025 is as under: -.
Applicant filed written submissions arguing settlement prior to Committee of Creditors constitution on 29.10.2025. Form FA on 27.10.2025 mandates withdrawal without 90 percent approval. Interim Resolution Professional acted hastily in forming Committee of Creditors.
The Applicant seeks impleadment in IA No.1290/NCLT(AHM)/2025 filed by interim resolution professional under Section 12A of Insolvency and Bankruptcy Code 2016. As settlement occurred between original operational creditor and Suspended Director with Form-FA issued on 27.10.2025 prior to committee of creditors constitution.
The Applicant is authorized by power of attorney dated 10.12.2025. Applicant represents suspended director who contested admission order negotiated settlement and has rights impacted by corporate insolvency resolution process. Party whose rights are affected is necessary party under Order I Rule 10(2) of Code of Civil Procedure Section 60(5)(c) of Insolvency and Bankruptcy Code and Rule 11 of National Company Law Tribunal Rules.
National Company Law Tribunal Mumbai Bench in Purusottam Behera (IRP) v. Amluckie Investment Co. Ltd IA no. 67 of 2025 in CP(IB) no. 834 of 2020 held directors of suspended board are stakeholders in Section 12A withdrawal application and entitled to be heard when settlement is executed by them. Regulation 30A distinguishes pre-committee of creditors withdrawal under Regulation 30A(1)(a) from post-committee of creditors withdrawal. Form-FA issued on 27.10.2025 before committee of creditors so falls under Regulation 30A(1)(a).
Supreme Court in Abhishek Singh v. Huhtamaki PPL Ltd SLP (Civil) no. 6452 of 2021 held settlement prior to committee of creditors requires adjudicating authority to permit withdrawal forthwith without deferral due to other creditors. Supreme Court in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 with Special Leave Petition (C) No. 21023 of 2024 recognized Regulation 30A as complete mandatory mechanism for pre-committee of creditors withdrawal. Committee of creditors constitution after Form-FA is jurisdictional transgression and first meeting on 05.11.2025 becomes otiose.
In view of above-narrated facts the applicants have sought allowance of impleadment recognition of settlement under Regulation 30A(1)(a) set aside of post-Form-FA actions including committee of creditors constitution and permission of corporate insolvency resolution process withdrawal under Section 12A of Insolvency and Bankruptcy Code.
The Brief Summary of Written Submissions filed on 17.12.2025 vide Inward No. D-8593 by the Mukund Security in Interlocutory Application No. 1290 of 2025 is as under: -
Mukund Security and Investment Limited in written submissions opposed withdrawal as creditor-driven process. It is stated that Corporate Debtor was admitted into CIRP by order dated 06.10.2025 in a matter filed by one Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016.
The Applicant issued a Public Announcement on 09.10.2025, inviting claims of all the creditors and the last date for claim submission was 20.10.2025, after which the Applicant verified claims and prepared the list of creditors.
On 29.10.2025, the Applicant prepared the Report on Constitution of the Committee of Creditors, certifying formation of a Committee of Creditors comprising four financial creditors and filed Interlocutory Application No. 1296 of 2025 seeking certification of the constitution of Committee of Creditors. The present Application for withdrawal under Section 12A of the Code was filed on 29.10.2025 and registered on 30.10.2025.
The binding judicial principle to decide the application for withdrawal under Section 12A of the Code and Regulation 30A is that the date on which the Section 12A Application is acted upon will be determinative to decide the application filed under Regulation 30A, as held by National Company Law Tribunal, Bengaluru Bench in Pankaj Srivastava (RP of Think and Learn Pvt. Ltd.) v. BCCI & Ors., IA 837/2024. The said principle was upheld by National Company Law Appellate Tribunal, Chennai in Riju Ravindran v. Pankaj Srivastava, Company Appeal (AT)(CH)(INS) No. 89/2025.
The Applicant convened the meeting of Committee of Creditors pursuant to directions of National Company Law Appellate Tribunal New Delhi, where out of 4 members, 3 members having 52.66% of voting rights opined in favour of continuation of Corporate Insolvency Resolution Process, and all 4 members filed replies opposing the withdrawal. The Committee of Creditors unanimously with 100% voting opined to continue the Corporate Insolvency Resolution Process, as affirmed in Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India (2019) 4 SCC 17, K. Sashidhar v. Indian Overseas Bank, (2019) 12 SCC 150 and Essar Steel (India) Ltd. Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531.
The Committee of Creditors has been constituted while the present application for withdrawal is pending, as held by Supreme Court of India in GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 that proceedings become in rem and all stakeholders are to be considered.
In view of above-narrated facts, the Mukund Security has sought the rejection of the present Application for withdrawal and continuation of the Corporate Insolvency Resolution Process against the Corporate Debtor.
The Brief Summary of Written Submissions by Respondent/IRP on on 15.12.2025 in Interlocutory Application No. 1389 of 2025.
Interim Resolution Professional in written submissions asserted that the Impleadment Application IA No.1389/NCLT(AHM)/2025 was filed on 24.11.2025 without valid authority in favour of Prem Agarwal on behalf of suspended management. The authority letter dated 14.03.2025 issued by Sanjay Inderchand Agarwal predates 06.10.2025 which is the date of admission of CIRP. The authority letter authorizes Prem Agarwal to act before the NCLAT and provides no authority to move the application before the NCLT.
Vide Affidavit dated 12.12.2025 the Applicant placed on record General Power of Attorney dated 10.12.2025 which is after filing of the application and cannot cure the defect of authority. The General Power of Attorney is prospective in nature and has no ratification clause for earlier actions taken without authority of the Principal. Hon'ble NCLAT in Software One India Pvt. Ltd. v. Magnamious Systems Pvt. Ltd., (2022) ibclaw.in 295 NCLAT Company Appeal (AT) (Insolvency) No. 828 of 2019 decided on 18.04.2022 upheld actions on strength of subsequent ratification which is absent here.
No relief challenges constitution of the CoC in any application and allegations are made in Impleadment Application without hearing to financial creditors in withdrawal application under section 12A of IBC. The CoC was constituted on 29.10.2025 as per Regulation 17 of CIRP Regulations 2016 in absence of stay on CIRP. Hon'ble NCLAT in Himanshu Singh v. HDFC Bank Ltd. and Anr., (2025) ibclaw.in 168 NCLAT in Company Appeal (AT) (Insolvency) No. 336 of 2025 decided on 05.03.2025 clarified tribunal powers to consider stakeholder views before allowing section 12A referring to GLAS Trust Company LLC v. BYJU Raveendran and Ors., Civil Appeal No. 9986 of 2024 decided on 23.10.2024.
In view of above narrated facts the IRP has sought dismissal of the Impleadment Application on ground of lack of authority with no objection to implead the Applicant as party respondent in IA 1290 of 2025 if authority is valid and declaration that prayers (c) and (d) are non est.
We have heard Ld. Counsel for the Applicant/IRP, Ld. Counsel for the Financial Creditors, Ld. Counsel for the Operational Creditors as well as Ld. Counsel for the Suspended Director, considered the oral submissions of the parties and perused the material on record. The following issues are framed for determination: -
Whether the Application under Section 12A of the Insolvency and Bankruptcy Code, 2016 filed as IA No.1290/NCLT(AHM)/2025 seeking withdrawal of CIRP is maintainable in law?
Whether the settlement arrived at between the Operational Creditor and the Corporate Debtor prior to constitution of the CoC mandates automatic withdrawal of CIRP under Regulation 30A(1)(a)?
Whether the constitution of the Committee of Creditors by the IRP on 29.10.2025 was lawful and in accordance with the Insolvency and Bankruptcy Code, 2016 and CIRP Regulations?
Whether the Interim Resolution Professional has acted in breach of statutory duties or exhibited bias warranting interference by this Tribunal?
Whether IA No.1389/NCLT(AHM)/2025 filed by the Suspended Director seeking impleadment and other reliefs is maintainable and merits acceptance?
14. Findings on Issue No.(i): Whether the Application under
Section 12A of the Insolvency and Bankruptcy Code, 2016 filed as IA No.1290/NCLT(AHM)/2025 seeking withdrawal of CIRP is maintainable in law?
The application under Section 12A read with Regulation 30A(1)(a) of the CIRP Regulations has been filed by the IRP on the basis of Form-FA submitted by the original Operational Creditor prior to the constitution of the CoC. While the Form-FA was issued on 27.10.2025 and the Settlement-cum-MoU executed on 28.10.2025, the CoC was constituted on 29.10.2025 as per the mandatory timeline under Regulation 17 of the CIRP Regulations. The IA was registered on 30.10.2025.
Although Regulation 30A prescribes the procedural mechanism for filing a withdrawal application at different stages of CIRP, it does not dilute or override the substantive statutory requirement of approval under Section 12A.
As held by the NCLT Bengaluru Bench in Pankaj Srivastava (RP of Think and Learn Pvt. Ltd.) v. BCCI & Ors. (IA 837/2024 in CP(IB) 149/BB/2023), and upheld by the NCLAT Chennai in Riju Ravindran v. Pankaj Srivastava (Company Appeal (AT)(CH)(INS) No. 89 of 2025), the determinative date for ascertaining the applicability of Regulation 30A(1)(a) or (1)(b) is the date on which the withdrawal application is acted upon or decided by the Adjudicating Authority, rather than the date of submission of Form-FA.
In the present case, the CoC has already been constituted well before the disposal of this application, and the CoC has unanimously voted against the withdrawal with 100% voting share with admitted claims aggregating to approximately to Rs.61,41,67,420/-. Therefore, the application falls under Regulation 30A(1)(b), requiring approval by 90% voting share of the CoC, which has not been obtained. The reliance on Regulation 30A(1)(a) is misplaced at this stage.
Hon'ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank and Anr., (2017) ibclaw.in 02 SC relied by IoB, held that IBC creates rights in rem affecting stakeholders, private settlements inadmissible if prejudice body of creditors. Further, Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors., (2019) ibclaw.in 03 SC relied by IoB, held that post-admission requires 90 percent to halt collective process.
Additionally, the Hon'ble Supreme Court in Vallal RCK v. Siva Industries and Holdings Ltd. and Ors., (2022) ibclaw.in 63 SC emphasized approval on thresholds and held that "when 90% and more of the creditors, in their wisdom after due deliberations, find that it will be in the interest of all the stake-holders to permit settlement and withdraw CIRP."
Even assuming arguendo that it qualifies under Regulation 30A(1)(a), the Hon'ble Supreme Court in Civil Appeal No. 9986 of 2024, GLAS Trust Company LLC v. BYJU Raveendran and Ors. (2024) ibclaw.in 275 SC, decided on 23.10.2024, has clarified that post-admission, the CIRP becomes a proceeding in rem, and the Adjudicating Authority must ensure the protection of all stakeholders' interests, including those of creditors who would form the CoC.
Further, Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 336 of 2025, Himanshu Singh v. HDFC Bank Ltd. and Anr. (2025) ibclaw.in 168 NCLAT, decided on 05.03.2025, further held that the Adjudicating Authority is not a mere post office and must consider relevant factors such as the nature and quantum of claims before allowing withdrawal, even pre-CoC. Hon'ble NCLAT considered judgment of the Hon'ble Supreme Court of 'Abhishek Singh' Vs. 'Huhtamaki PPL Ltd. & Anr.' reported in 2023 SCC OnLine SC 349 decided on 28.03.2023 and also the recent judgment of the Hon'ble Supreme Court in 'GLAS Trust Company LLC' Vs. 'BYJU Raveendran & Ors.' decided on 23.10.2024, while the following was held by the Hon'ble Apex Court:
'24. Adjudicating Authority is not mere post office who has to allow the withdrawal filed under 12A which is filed before the constitution of the CoC which is the ratio of the judgment of the Hon'ble Supreme Court in 'GLAS Trust Company LLC' (Supra).
25.Adjudicating Authority has to advert to the relevant factors which may include the nature and quantum of claim of the stakeholders. In a case where Adjudicating Authority finds that substantial and majority of claim has already settled with the corporate debtor that may be a factor which may weigh to the Adjudicating Authority in allowing 12A application. No straight jacket formula can be laid down for adjudication by the Adjudicating Authority of a 12A application and the objections filed therein. Facts of each application under 12A and objection therein need to be looked into before taking a decision as to whether the application under 12A be allowed or rejected."
As summarized in Himanshu Singh (NCLAT ratio): "The Adjudicating Authority... must exercise an adjudicatory role akin to that post-CoC, treating the proceedings as "in rem" and hearing all parties concerned... no rigid formula applies.
Here, admitted claims of the Financial Creditors aggregate to Rs.61,41,67,420/-, dwarfing the Operational Creditor's settlement amount of Rs.1,18,46,826/-. The settlement is bilateral and does not address the interests of other creditors. Moreover, no actual payment has been made under the MoU, rendering it contingent and illusory. Here, Financial Creditors/CoC members 100 percent voted against withdrawal of CIRP, as per affidavit dated 11.12.2025.
In light of the unanimous opposition by the CoC and the prejudice to other stakeholders, the application, while procedurally filed under Section 12A, is not maintainable on merits and must be rejected to uphold the collective resolution process under the IBC.
Findings on Issue No.(ii): Whether the settlement arrived at between the Operational Creditor and the Corporate Debtor prior to constitution of the CoC mandates automatic withdrawal of CIRP under Regulation 30A(1)(a)?
The Suspended Director contends that the Form-FA was submitted by the Operational Creditor on 27.10.2025 i.e. prior to CoC constitution which mandate automatic withdrawal under Regulation 30A(1)(a) and does not require consideration CoC approval.
However, as per the Hon'ble Supreme Court in Abhishek Singh v. Huhtamaki PPL Ltd. & Anr, (2023) ibclaw.in 37 SC decided on 28.03.2023, while pre-CoC settlements are permissible, Regulation 30A provides the complete mechanism, and the Adjudicating Authority must permit withdrawal forthwith only if it satisfies the statutory framework and protects stakeholder interests, but no automatic mandate.
The GLAS Trust judgment. (2024) ibclaw.in 275 SC reinforces that bilateral settlements cannot defeat the rights of other creditors created upon admission. The NCLAT in Himanshu Singh, (2025) ibclaw.in 168 NCLAT emphasized that no straight-jacket formula applies; the Adjudicating Authority must advert to factors like claim quantum and majority settlements.
Here, the settlement ignores substantial Financial Creditors dues and is contingent on withdrawal, lacking enforceability. There is no automatic mandate; the Adjudicating Authority retains discretion to reject if it prejudices stakeholders. Given the 100% CoC opposition and minimal settlement vis-à-vis total claims, no automatic withdrawal is warranted.
It is settled position of law that once Corporate Debtor is admitted to CIRP, the process ceases to remain bilateral and becomes a collective mechanism, as held in Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407. A settlement between the Operational Creditor and the Corporate Debtor, without addressing the claims of Financial Creditors exceeding Rs. 61.41 Crores, cannot be a ground for termination of CIRP.
Therefore, the mere filing of Form-FA prior to constitution of the CoC does not create an indefeasible right of automatic withdrawal of CIRP, nor does it render the subsequent constitution of the CoC illegal.
16. Findings on Issue No.(iii): Whether the constitution of the
Committee of Creditors by the IRP on 29.10.2025 was lawful and in accordance with the Insolvency and Bankruptcy Code, 2016 and CIRP Regulations?
Regulation 17 of the CIRP Regulations, 2016 mandates constitution of the CoC within prescribed timeline of the IRP's appointment, (here, admission on 06.10.2025, due date 29.10.2025). Thus, in the absence of any stay or restraint order either from this Tribunal or from the Hon'ble NCLAT, the IRP was statutorily bound to proceed with constitution of the CoC.
The record reveals that although the settlement proposal was noted by Hon'ble NCLAT on 27.10.2025, no order staying CIRP or restraining constitution of the CoC was passed. Further, disposed of the appeal on 04.11.2025 without staying the CIRP or CoC formation.
Rather, Hon'ble NCLAT, by its order dated 04.11.2025, expressly recorded that the CoC had already been constituted and directed that the IRP may convene the meeting with CoC only for the purposes of Section 12A read with Regulation 30A of the IBBI (CIRP) Regulations, 2016. The said judicial finding has attained finality and cannot be collaterally assailed in the present proceedings.
Further, the IBBI FAQs clarify that the IRP must continue CIRP duties, including CoC constitution, despite a pending Section 12A application, until approved by the Adjudicating Authority. Non-compliance would breach statutory obligations.
The case law of GLAS Trust Company LLC v. BYJU Raveendran and Ors. (2024) ibclaw.in 275 SC cannot be relied upon by the Applicant/Suspended Director in the present case as the Hon'ble NCLAT in that case has passed an interim order staying the constitution of the CoC.
Along with the same, much emphasis has been placed by the Applicant/Suspended Director on the judgment of the Hon'ble Supreme Court in Abhishek Singh v. Huhtamaki PPL Ltd. & Anr. (2023) ibclaw.in 37 SC to contend that the Interim Resolution Professional ought not to have proceeded with the constitution of the Committee of Creditors and that the CIRP ought to have been halted in view of the settlement/withdrawal proposal.
This Tribunal finds that the reliance placed on the judgments of GLAS Trust and Abhishek Singh is misconceived and wholly inapplicable to the facts of the present case. In Abhishek Singh (supra), the Hon'ble Supreme Court was dealing with a situation where: -
a complete settlement had been arrived at within two days of admission of the Section 9 petition; ii. the entire settlement amount had already been paid to the Operational Creditor; iii. an application for withdrawal under Section 12A read with Regulation 30A was filed before constitution of the CoC; and iv. crucially, the Hon'ble NCLAT had expressly stayed the constitution of the CoC pending consideration of the withdrawal application.
It was in those peculiar and exceptional circumstances that the Hon'ble Supreme Court held that the NCLT ought to have exercised its inherent powers and should not have delayed consideration of the withdrawal application, thereby allowing third-party claims to intervene and frustrate a concluded settlement.
The factual matrix in the present case stands on an entirely different footing. In the instant proceedings:
no unconditional or fully acted-upon settlement has been placed on record; ii. the withdrawal application has not received the approval of 90% voting share of the Committee of Creditors, as mandated under Section 12A of the Code; iii. there was no stay order passed by the Hon'ble NCLAT or any competent court restraining the Interim Resolution Professional from discharging his statutory duties; and iv. the Committee of Creditors, once constituted, has by majority voting share resolved to continue the CIRP.
Unlike Abhishek Singh (supra), the present case has progressed to a stage where the CIRP has assumed a collective character, and the commercial wisdom of the Committee of Creditors has come into operation. It is well settled that once the CoC is constituted and has taken a conscious decision in accordance with the Code, the Adjudicating Authority cannot supplant such decision on the basis of a bilateral arrangement or minority objections.
Accordingly, this Tribunal holds that the constitution on 29.10.2025 was mandatory, lawful and in complete compliance with the IBC and CIRP Regulations. Allegations of haste to defeat Regulation 30A(1)(a) are untenable, as the IRP complied with timelines absent any stay.
Findings on Issue No.(iv): Whether the Interim Resolution Professional has acted in breach of statutory duties or exhibited bias warranting interference by this Tribunal?
Serious allegations of bias, misconduct and breach of duty have been levelled against the IRP by the Suspended Director.
Upon careful examination of the record, this Tribunal finds no substance whatsoever in such allegations. The IRP has strictly acted in accordance with the statutory framework by:
issuing public announcement on 09.10.2025; ii. collating and verifying claims; iii. constituting the CoC within statutory timelines; iv. placing the settlement and withdrawal application before this Tribunal; and
convening the CoC only pursuant to directions of the Hon'ble NCLAT.
The Insolvency and Bankruptcy Board of India has clarified that filing of a Section 12A application does not absolve the IRP of statutory duties unless withdrawal is approved by the Adjudicating Authority
Thus, the IRP issued public announcement on 09.10.2025, verified claims, constituted CoC on due date, filed the IA under Section 12A promptly, and conducted meetings as directed by NCLAT and this Tribunal. Voting was held transparently, resulting in unanimous opposition.
The actions of the IRP reflect procedural propriety, neutrality and adherence to statutory mandate, and no material has been placed on record to establish mala fides or dereliction of duty.
This Tribunal therefore records a categorical finding that the IRP has performed his duties strictly in compliance with the Insolvency and Bankruptcy Code, 2016 and applicable Regulations
No evidence of bias or breach is presented. The IRP's actions align with IBC provisions and IBBI guidelines. Allegations of defeating settlement are baseless, as duties continue until withdrawal approval. No interference or disciplinary reference is warranted.
Findings on Issue No.(v): Whether IA No.1389/NCLT(AHM)/2025 filed by the Suspended Director seeking impleadment and other reliefs is maintainable and merits acceptance?
The IA No.1389/NCLT(AHM)/2025 has been filed by the POA holder of the Suspended Board of Directors inter-alia seeking impleadment, withdrawal of CIRP and allegations against the IRP.
As per NCLT Mumbai in Purusottam Behera (IRP) v. Amluckie Investment Company Ltd. (IA(IBC) No. 67/2025 in CP(IB) No. 834/MB/2020), suspended directors are stakeholders in Section 12A proceedings and entitled to be heard, especially when settlement is executed by them.
However, the initial PoA dated 14.03.2025 predates admission and lacks authority for NCLT proceedings. The subsequent PoA dated 10.12.2025 is prospective without ratification clause for prior actions, as required as per NCLAT Judgment in Software One India Pvt. Ltd. v. Magnumious Systems Pvt. Ltd. (Company Appeal (AT) (Insolvency) No. 828 of 2019).
While the impleadment for hearing is maintainable as a necessary party under Order I Rule 10(2) CPC read with Section 60(5)(c) IBC, the defect in authority renders the application as filed non-maintainable.
Even otherwise, the reliefs sought in IA No.1389/NCLT(AHM)/2025 are entirely contingent upon allowance of IA No.1290/NCLT(AHM)/2025, which itself has been found to be untenable as on merits, prayers for declaring settlement under Regulation 30A(1)(a), invalidating CoC, and withdrawing CIRP are rejected for reasons aforesaid.
Further, the Suspended Director has no vested right to insist upon withdrawal of CIRP contrary to the commercial wisdom of the Committee of Creditors.
It is further noted that a Settlement-cum-Memorandum of Understanding dated 28.10.2025 was purportedly executed between the original Operational Creditor and the Suspended Director of the Corporate Debtor for an aggregate amount of Rs.1,18,46,826/-. Under the said arrangement, the Suspended Director agreed to pay a sum of Rs. 61,00,000/- within one working day from the date of an order permitting withdrawal of the CIRP under Section 12A of the Code, while the balance amount of Rs. 57,46,826/- was proposed to be paid on mutually agreed terms within a period of one year, subject to the release of the concerned person from judicial custody.
However, upon scrutiny, this Tribunal finds that no actual payment has been made pursuant to the said settlement, and the entire arrangement is contingent upon a future event, namely, withdrawal of the CIRP, rendering it unenforceable and contrary to IBC objectives under Section 12A (collective creditor interests). The so-called settlement does not result in discharge of any existing liability and merely contemplates future payments dependent upon uncertain and extraneous conditions.
This Tribunal is therefore constrained to observe that the said Settlement-cum-MoU is illusory in nature and lacks immediate enforceability, and appears to have been entered into only with a view to secure withdrawal of the CIRP, without addressing or settling the substantial dues owed to the Financial Creditors, apart from other Operational Creditors.
It is further significant to note that the total admitted claims of four Financial Creditors far exceed the settlement amount, and the rights of such creditors cannot be defeated by a bilateral arrangement between the Operational Creditor and the Suspended Director. The total claims from four Financial Creditors are as under: -
| Sr. No. | Financial Creditor | Claim Admitted (INR) | Voting Share (%) | Category |
|---|---|---|---|---|
| 1 | State Bank of India | Rs. 29,13,57,691/- | 47.44% | Secured |
| 2 | Bank of Maharashtra | Rs.16,26,82,742/- | 26.49% | Secured* |
| 3 | Indian Overseas Bank | Rs.9,99,99,671/- | 16.28% | Secured* |
| 4 | Mukund Security and Investment Ltd. | Rs. 6,01,27,316/- | 9.79% | Unsecured |
| Total | Rs. 61,41,67,420/- | 100% |
Moreover, several Company Petitions filed by other Operational Creditors namely C.P.(IB)/201(AHM)2025, C.P.(IB)/213(AHM)2025, C.P.(IB)/215(AHM)2025 and C.P.(IB)/216(AHM)2025 came to be dismissed on 06.10.2025 as infructuous upon admission of the present Company Petition, thereby further underscoring the collective nature of the CIRP proceedings.
In these circumstances, the Tribunal is of the considered view that the alleged settlement cannot be treated as a bona fide basis for withdrawal of the CIRP under Section 12A of the Code, as it neither satisfies the statutory requirements nor protects the interests of the stakeholders at large
Hence, reliefs as sought in the IA No.1389/NCLT(AHM)/2025 are denied.
I.A. No.1290/NCLT(AHM)/2025 in CP(IB) No.211/9(AHM)2025 filed by the Applicant/IRP is dismissed. The Corporate Insolvency Resolution Process (CIRP) of Vimla Fuels & Metals Limited shall continue in accordance with law. The IRP is directed to proceed with the process expeditiously.
Further, IA No.1389/NCLT(AHM)/2025 filed by the Applicant/Suspended Director is also dismissed. No reliefs are granted to the Applicant/Suspended Director. Parties to bear their own costs.
Registry is directed to communicate the order to all concerned parties. No further directions are needed. File be consigned to records.