India – Withdrawal Of The CIRP Against The Corporate Debtor Without Settlement Of Claims Of All The Creditors Cannot Be Allowed .

Order dated: 06 August 2021
 

Summary:
 

In this matter, the question that arose before the NCLT, Mumbai Bench was whether withdrawal of corporate insolvency resolution process (CIRP) can be permitted when the interim resolution professional received claims post admission of the corporate debtor into CIRP.

 

It was held that withdrawal of the CIRP against the corporate debtor without settlement of claims of all the creditors cannot be entertained. The NCLT referred to the judgement of Hon’ble Supreme Court in Indus Biotech v. Kotak India wherein it was held that when a petition is admitted it becomes a proceeding in rem, where the creditor who has triggered the process would lose the control in the proceedings and the CIRP proceedings is required to be considered under the provision of the Code.
 

 

For further information, please contact:  

Souvik Ganguly, Partner, Acuity Law

al@acuitylaw.co.in