NCLAT : In Prowess International (P.) Ltd. vs. Parker Hannifin India (P.) Ltd.

Appellate Tribunal cannot grant relief by way of permission to withdraw the application when the order admitting the application has not been challenged.

Adjudicating Authority may permit withdrawal of the application by the operational creditor before its admission, but the Tribunal has no power to allow its withdrawal by any one after its admission.

Insolvency and Bankruptcy Code (Application to Adjudicating Authority) Rules, 2016 – Rule 8 – Application initiating insolvency process – Withdrawal of application before admission – Permission of Adjudicating Authority therefor – Is any interference called for in the absence of any illegality in admission when the Adjudicating Authority has refused the applicant to withdraw the application after admission of the same – Can any relief be granted when the order of admission is not under challenge – Whether as per rule 8 Adjudicating Authority may permit withdrawal of the application before its admission but Tribunal has no power to allow any applicant or any other person to withdraw the application after admission – Held, yes [Para 7] – Whether no interference is called for in the matter in the absence of any illegality – Held, yes [Para 8] – Whether the Appellate Tribunal is not deciding the question of illegality of the order by which the application under section 9 was admitted in this case – Held, yes, as the said order was not challenged [Para 9] – Whether the relief sought, namely, permission to withdraw cannot be granted in this case – Held, yes, as the order of admission was not under challenge operational creditor cannot be granted the relief sought [Para 10].

There is need to expedite approval of resolution plan where claims of all creditors have been satisfied.

Where all creditors have been satisfied, Adjudicating Authority, without waiting for 180 days of resolution process, may approve resolution plan under section 31.

Insolvency and Bankruptcy Code, 2016 – Sections 30 and 31 read with sections 21 and 24 – Corporate Insolvency Resolution Process – Resolution plan – Submission and approval of – Need to expedite where all creditors have been satisfied – Can Adjudicating Authority without waiting for 180 days of resolution process, may approve resolution plan under section 31 – Is the present case not to be interfered with and has to be remitted to the Adjudicating Authority for its satisfaction that the interest of all the stakeholders has been satisfied – Whether Adjudicating Authority if satisfied with resolution plan approved by the Committee of creditors may approve it in terms of sub-section (1) of section 31 – Held, yes [Para 15] – Whether if approval of plan is granted the moratorium order passed shall cease to have effect in view of sub-section (3) of section 31 – Held, yes [Para 16] – Whether in this case interim resolution professional has informed that the meeting of the committee of creditors in terms of section 21 has taken place, and also their meeting as required under section 24 after notice has taken place – Held, yes [Para 17] – Whether instead of interfering with the impugned order, the Appellate Tribunal in the circumstance of the present case, remit the case to the Adjudicating Authority for its satisfaction whether the interest of all stakeholders have been satisfied, and whether one or other creditor has not raised any claim, like Punjab and National Bank, in this case – Held, yes, as the Adjudicating Authority taking into consideration the Insolvency Resolution Plan and report of the Insolvency Resolution Professional has to close the proceedings [Para 20].

[2017] 140 CLA 217 (NCLAT)

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