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Judgment
IA 1164/2019 is taken up today for hearing. Counsel for Applicant is present. Resolution Professional is present in person. Heard them.
Orders passed vide separate orders.
Per: Hon'ble Shri Narender Kumar Bhola, Member (Technical)
The Application is filed by the Applicant/Operational Creditor under Section 12A of I&B Code, 2016 Read with Regulation 30A of Insolvency and Bankruptcy Board of India(Insolvency Resolution Process for corporate persons) Regulations, 2016 seeking permission to withdraw the Company Petition i.e CP(IB)No.55/9/HDB/2019.
The brief averments made in the Application are as follows:
a) It is averred that this Tribunal vide order dated 09.09.2019 admitted the petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by the Operational Creditor and ordered initiation of Corporate Insolvency Resolution Process against corporate debtor and appointed IRP.
b) It is averred that in compliance with the Order of the Tribunal Interim Resolution Professional made public announcement dated 26.09.2019 under Form-A inviting the creditors of the corporate debtor to file their claims. IRP after receiving the claims formed COC with only one creditor i.e Applicant/ Operational creditor. Further COC in its first meeting dated 15.10.2019 confirmed the appointment of Interim Resolution Professional as Resolution Professional.
It is averred that during the pendency of CIRP proceedings both the parties approached the RP stating that they have compromised by virtue of a settlement agreement dated 10.12.2019.
It is averred that in the (5th) COC meeting dated 10.12.2019 the settlement agreement was approved by the COC i.e the Applicant who is the only member of the COC in terms of 90 percent of voting share. Further Mr.Mahesh Lingareddy, who is the Chairman and Managing Director of the Respondent /Corporate debtor has also given a personal guarantee dated 10.12.2019 assuring that if the Respondent/corporate debtor fails to pay the balance outstanding amount of USD 650,000, Mr.Mahesh Lingareddy shall pay the amount from his personal funds and assets. A copy of the Settlement Agreement dated 10.12.2019 is annexed to the application and marked as Annexure-A/1. A copy of the Guarantee Agreement dated 10.12.2019 is annexed here with as Annexure-A/2.
It is averred that the settlement agreement and guarantee agreement along with FORM FA is filed before the Tribunal to withdraw the application bearing CP (IB)No.55/9/HDB/2019. Copy of the withdrawal application in Form FA is annexed hereto and marked as Annexure-A/3.
It is averred that in terms of settlement agreement dated 10.12.2019 before the execution of the said agreement the Respondent/Corporate debtor has paid USD 600,000 via Six (6) wire transfers from 21.10.2019 to 06.12.2019 to the Applicant/ operational creditor out of the total principal outstanding of USD 1,250,000.
It is averred that as per the settlement agreement, the balance principal outstanding of USD 650,000 will be paid by the respondent on or before 29.02.2020 and if any default in payment of the balance amount on or before 29.02.2020 the applicant has right to re-initiate the CIRP proceedings against the corporate debtor along with interest at 24% p.a on the unpaid amount from the date of default.
It is averred that the applicant/operational creditor has provided a demand draft for an amount of Rs.3,00,000/- dated 19.10.2019 in favour of Resolution Professional towards estimated cost incurred for purpose of Regulation 31(c) and (d) till the date of the present application. It is also submitted that the applicant /operational creditor has already paid Rs.2,00,000/- to the Resolution Professional in terms of the order dated 09.09.2019. Thereby total payment of Rs.5,00,000/- towards the RP fees and the estimated cost was accepted by the Resolution Professional.
It is averred that the Tribunal may allow the applicant/operational creditor to withdraw the present application in terms of settlement agreement dated 10.12.2019 with a liberty to file a fresh petition if required. No prejudice or harm would be caused to the Respondent/corporate debtor in case the present petition is allowed.
Heard Resolution Professional. It is the case of the Resolution Professional that this Tribunal admitted the petition filed under Section 9 of IBC, 2016 on 09.09.2019 for initiation of CIRP, granting moratorium and appointment of IRP.
This Application is filed under Section 12A of I & B Code, 2016, Read with Regulation 30 A of the Insolvency and Bankruptcy (Corporate insolvency Resolution process) Regulations, 2016. The Petition filed under Section 9 by the Operational Creditor was admitted by this tribunal on 09.09.2019 and ordered Corporate Insolvency Resolution Process against Corporate Debtor. Resolution Professional reported to the Tribunal that Parties settled the matter by virtue of settlement agreement dated 10.12.2019 and requested the Tribunal to withdraw the Petition.
Applicant stated that an amount of Rs. USD 6,00,000 is paid by the Respondent/corporate debtor to the applicant/operational creditor and an amount of USD 6,50,000 is to be paid by the corporate debtor to the applicant on or before 29.02.2020 as per the settlement agreement dated 10.12.2019.
Applicant further stated that an amount of Rs.5,00,000/- is paid to the RP towards Fees and estimated cost for purposes of Clauses (c) and (d) of the Regulation 31 and Regulation 33 of the Insolvency and Bankruptcy(Corporate Insolvency Resolution Process) Regulations, 2016
Applicant further has stated that it has enclosed the copy of the settlement Agreement and Guarantee Agreement including Form FA. Thus the procedure prescribed under Regulation 30A (1) (a) of IBBI (Insolvency Resolution Process for Corporate Persons), 2016 has been followed. This Adjudicating Authority has power under Section 12A Read with Regulation 30A (1)(a) of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 to permit for withdrawal of the application even after admission of the Petition. By exercising the power U/s 12A of I&B Code the application filed by applicant is allowed and the CIRP started against corporate debtor and moratorium order issued there under stands withdrawn and the corporate debtor is allowed to function independently through its Board of Directors with immediate effect.
Accordingly, this Application is allowed.