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Judgment
ORDER
IA (IBC)/280/2025:
This Interlocutory Application (IA) has been filed, vide Diary No. 1733 dated 25.08.2025 by the Interim Resolution Professional (IRP) under section 12A of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) praying the following reliefs:
(i)Allow the instant Interlocutory Application filed u/s 12A of the Code r/w Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016;
(ii)Allow the withdrawal of the main Company Petition, CP (IB) 18/7/ AMR/2025, admitted u/s 7 of the Code;
(iii)Consequently, direct that the moratorium order shall cease to have effect; and
(iv)Pass such other order(s) as this Adjudicating Authority may deem fit and proper in the interest of justice.
The facts stated in this IA, as pleaded by the IRP during the course of hearings, have been summarised below:
The main Petition filed by the Financial Creditor M/s. Canara Bank Limited under Section 7 of the IBC read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 was admitted by this Adjudicating Authority vide order dated 22.07.2025 in CP (IB) 18/7/AMR/2025, wherein the Applicant was appointed as the Interim Resolution Professional (IRP) and was directed to take necessary actions in accordance with the provisions of the IBC.
After receiving the above admission order, the IRP, on 26.07.2025, intimated the suspended Board of Directors regarding the admission of Corporate Debtor into the Corporate Insolvency Resolution Process (CIRP) and his appointment as IRP.
In compliance with Section 13 of the IBC, the IRP issued a public announcement in ‘The South India Times’ (English) and ‘Prajasakthi’ (Telugu) in Andhra Pradesh on 29.07.2025, inviting submission of claims from the creditors on or before 12.08.2025. As per MCA records, Canara Bank is the sole secured Financial Creditor and has submitted its claim. Copies of the public announcement made in Form-A along with claim received from the Financial Creditor in Form-C are annexed to the Application as Annexure-A04 and Annexure-A05 respectively.
After sending intimation by email, the IRP, on 10.08.2025, visited the registered office-cum-factory of the Corporate Debtor at Nellore, met Mr. Chenchaiah Vemuru (Promoter Director and Member of the suspended Board of Directors), handed over the notice regarding CIRP, affixed the same at the factory premises, and assumed possession and control of the operations from the suspended Board of Directors.
The Corporate Debtor and the Financial Creditor have entered into a One Time Settlement (OTS), and referred to email dated 19.08.2025 (at page 60 of the Application) wherein the Corporate Debtor informed both the IRP and the Financial Creditor that the account had been fully settled under the terms of the OTS, and requested that the claim of Canara Bank not be considered and that the process of constitution of the CoC be stopped.
The Applicant on 19.08.2025 has received a request in Form-FA, from M/s. Canara Bank Limited for withdrawal of the Application bearing CP (IB) 18/7/AMR/2025. Copies of the Form-FA, GPA given to Authorised Signatory of the Applicant Bank and Settlement Agreement between the Corporate Debtor and the Applicant/FC are annexed to the Application as Annexures-A07 to A09 respectively.
The Applicant has received an amount of Rs.3,47,480/- from the Applicant/FC in compliance with the requirement under Regulation 30A(2) of the CIRP Regulations through RTGS Reg. No. CNRBR52025081963583964 dated 19.08.2025. Accordingly, there are no unpaid expenses as on the date of filing of this Application, and therefore a Bank Guarantee, as contemplated under Regulation 30A, may not be required.
In terms of Regulation 30A(1)(a) of the CIRP Regulations, where an application for withdrawal is made, the IRP is required to submit the same to the Hon’ble NCLT on behalf of the Applicant within three days of its receipt. Accordingly, the IRP is filing the present I.A. pursuant to the request for withdrawal made by the Financial Creditor. The IRP is filing this Application keeping in view of the fact that till date no Committee of Creditors (CoC) has been constituted thereof.
During the course of hearing held on 02.09.2025, the IRP appeared in person and sought one day’s time to obtain the Audited Balance Sheet of the Corporate Debtor as on 31.03.2023, as reflected in the Master Data available on the MCA portal. The relevant extracts of the Master Data as available on the MCA website are reproduced below:
However, on 04.09.2025, Counsel appearing on behalf of the IRP submitted that the Audited Balance Sheet for the year ending 31.03.2023 was erroneously reflected in the Master Data of the Corporate Debtor and he sought one week’s time to file a certificate from the Registrar of Companies. Accordingly, the matter was adjourned and posted to 16.09.2025. On 16.09.2025, at the IRP’s request, the matter was finally listed today.
During today’s hearing, the IRP submitted that the mistake in MCA Master Data has got been corrected and the updated MCA Master Data reflects that the date of filing of the last balance sheet is 31.03.2020. He further submitted that he has filed two memos filed vide Diary Nos. 1780 dated 03.09.2025 and 1917 dated 23.09.2025. It was further submitted by him that the CoC has not been constituted as the Hon’ble NCLAT vide order dated 20.08.2025 in Company Appeal (AT) (CH) (Ins) No.395/2025 has directed that this Adjudicating Authority order dated 22.07.2025 be kept in abeyance and therefore CoC has not been constituted so far.
This Adjudicating Authority notes that, as held by the Hon’ble Supreme Court in GLAS Trust Company LLC vs. BYJU Raveendran & Ors., Civil Appeal No. 9986 of 2024 dated 23.10.2024, and reaffirmed by the Hon’ble NCLAT, Principal Bench, New Delhi in Himanshu Singh vs. Mr. Anil Kumar Mittal & Anr., Company Appeal (AT) (Insolvency) No. 336 of 2025 dated 05.03.2025, has held that the Adjudicating Authority while considering the application under 12A filed before the constitution of the CoC has also to hear all the parties concerned and considering all relevant factors on the fact of each case. Accordingly, this Adjudicating Authority posed a query to the Counsel for the Applicant as to whether all stakeholders of the Corporate Debtor, based on the claims admitted by the IRP and those reflected in the latest audited balance sheet, have provided their consent for withdrawal of CIRP under Section 12A of the IBC, 2016.
In response, the IRP submitted that the last Balance Sheet of the Corporate Debtor available is of as on 31.03.2020, according to which there are only two creditors namely, Syndicate Bank and unsecured loans from Directors. The IRP further submitted that in response to the public announcement dated 29.07.2025, he has received only one claim i.e. from Canara Bank (successor-in-interest of Syndicate Bank) in Form-C dated 08.08.2025, claiming an amount of Rs.65,27,38,255/- as on the insolvency commencement date, i.e., 22.07.2025.
In response to a specific query from this Adjudicating Authority, Mr.Chenchaiah Vemuru, suspended Director of the Corporate Debtor, who appeared through VC submitted that balance sheet after 31.03.2020 has not been prepared and confirmed there is no change in the composition of creditors, since the last audited Balance Sheet as on 31.03.2020.
On perusal of the updated MCA Master Data of the Corporate Debtor, it is noted that the date of last Balance Sheet is 31.03.2020 and that out of various charges created, only one charge is open in favour of Syndicate Bank. The relevant extracts of the Master Data available on the MCA website are reproduced below:
It is also noted that the Canara Bank (successor-in-interest of Syndicate Bank) is the sole financial creditor based on the records submitted by the IRP and statement of the Suspended Director recorded during the course of hearing held on 25.09.2025. The said sole Financial Creditor has given its consent and filed Form-FA duly signed by Mr. Nagaraj C. Meeshi, Chief Manager & Authorised Representative of Canara Bank required for withdrawal of the CIRP of the Corporate Debtor, wherein it is also stated that an amount of Rs.3,47,480/-has been transferred to the IRP in compliance with sub-regulation (2) of Regulation 30A of the CIRP Regulations. The extract of the Form-FA is reproduced below:
The IRP has submitted that the entire expenses of the CIRP has been paid accordingly.
In view of the above, and considering the consent in Form-FA submitted by the sole Financial Creditor to the IRP, and the acknowledgement by the IRP regarding receipt of CIRP-related fees and expenses, this Adjudicating Authority is inclined to allow the present application. Accordingly, the CIRP proceedings initiated against the Corporate Debtor in CP (IB) 18/7/AMR/2025 are hereby withdrawn. The Applicant stands discharged from his responsibilities as the Interim Resolution Professional of the Corporate Debtor, and the moratorium declared under Section 14 of the IBC shall cease to have effect. Accordingly, IA (IBC)/280/2025 is allowed and stands disposed of.
CP (IB) 18/7/AMR/2025:
In view of the above order passed in IA (IBC)/280/2025, CP (IB) 18/7/ AMR/2025 is dismissed as withdrawn.