Withdrawal of CIRP plea not allowed where purported plan was not a settlement simpliciter as envisaged u/s 12A
- News|Blog|Insolvency and Bankruptcy Code|
- 3 Min Read
- By Taxmann
- |
- Last Updated on 1 October, 2021
Case Details: Siva Industries and Holdings Ltd., In re - [2021] 130 taxmann.com 440 (NCLT- Chennai)
Judiciary and Counsel Details
-
- R. Sucharitha, Judicial Member and Anil Kumar B., Technical Member
- Sanjeev Kumar, Anshul Sehgal, Advs., Arvindh Pandian, Sr. Adv., Avinash Krishnan Ravi, Adv., Satish Parasaran, Sr. Adv., Subhang P. Nair and M.L. Ganesh, Advs. for the Appearing Parties.
Facts of the Case
In the instant case, the Corporate Insolvency Resolution Process (CIRP) in case of the corporate debtor was admitted and Insolvency Resolution Professional (RP) was appointed. Initially, two resolutions plans were received, however, both of them were withdrawn.
After this, a third resolution plan was received which did not receive consent from the Committee of Creditors(CoC). Soon after, the promoter of the corporate debtor, although ineligible to submit a resolution plan tried to restructure loans under the pretext of a settlement proposal.
NCLT Held
However, the purported plan was not a settlement simpliciter as envisaged under section 12A, rather, it was a business restructuring plan. Further, as per the settlement Plan, there was no final offer made by the promoter of the corporate debtor and also no acceptance made by CoC in this regard.
Therefore, there being ambiguity of terms of settlement and no finality having been reached between the promoter of corporate debtor and CoC as per settlement proposal, order for withdrawal of CIRP could not have been passed.
Case Review
-
- Arun Kumar Jagatramka v. Jindal Steel and Power Ltd. [2021] 125 taxmann.com 244/165 SCL 652 (SC) (para 24)
- Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd. [2021] 125 taxmann.com 360/166 SCL 678 (SC) (para 24)
- Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 24)
- India Resurgence Arc (P.) Ltd. v. Amit Metaliks Ltd. [2021] 127 taxmann.com 610 (SC) (para 24)
- Lalit Kumar Jain v. Union of India [2021] 127 taxmann.com 368 (SC) (para 24)
- Shweta Vishwanath Shirke v. Committee of Creditors [2019] 109 taxmann.com 30 (NCL-AT) (para 24)
- Brilliant Alloys (P.) Ltd. v. S. Rajagopal 2018 SCC OnLine SC 3154 (para 24)
- Maharashtra Seamless Ltd. v. Padmanabhan Venkatesh [2020] 113 taxmann.com 421/158 SCL 567 (SC) (para 24)
- Shaji Purushothaman v. Union Bank of India [Company Appeal (AT) (Insolvency) No. 921 of 2019 – NCLAT, dated 6-9-2019] (para 24)
- Satyanarayan Malu v. SBM Paper Mills Ltd. [2019] 105 taxmann.com 217 (NCLT-Mum.) (para 24)
- Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 (SC) (para 24)
- K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312 (SC) (para 24) distinguished.
List of Cases Referred to
-
- Arun Kumar Jagatramka v. Jindal Steel and Power Ltd. [2021] 125 taxmann.com 244/165 SCL 652 (SC) (para 24)
- Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd. [2021] 125 taxmann.com 360/166 SCL 678 (SC) (para 24)
- Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 24)
- India Resurgence Arc (P.) Ltd. v. Amit Metaliks Ltd. [2021] 127 taxmann.com 610 (SC) (para 24)
- Lalit Kumar Jain v. Union of India [2021] 127 taxmann.com 368 (SC) (para 24)
- Shweta Vishwanath Shirke v. Committee of Creditors [2019] 109 taxmann.com 30 (NCL-AT) (para 24)
- Brilliant Alloys (P.) Ltd. v. S. Rajagopal 2018 SCC OnLine SC 3154 (para 24)
- Maharashtra Seamless Ltd. v. Padmanabhan Venkatesh [2020] 113 taxmann.com 421/158 SCL 567 (SC) (para 24)
- Shaji Purushothaman v. Union Bank of India [Company Appeal (AT) (Insolvency) No. 921 of 2019 – NCLAT, dated 6-9-2019] (para 24)
- Satyanarayan Malu v. SBM Paper Mills Ltd. [2019] 105 taxmann.com 217 (NCLT-Mum.) (para 24)
- Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 (SC) (para 24)
- K. Sashidhar v. Indian Overseas Bank [2019] 102 taxmann.com 139/152 SCL 312 (SC) (para 24) distinguished.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied