Padma AnatharamanFacts of the Case
Parker Hannifin India Private Limited is an operational creditor of Prowess International Private Limited. A petition under Section 9 of Insolvency and Bankruptcy Code, 2016 i.e. Application for initiation of corporate insolvency resolution process by operational creditor was filed. And admitted as the same was in compliance of all the requirements of Sec 9 of The act. Not only that after admission , Public announcement was also made. Meanwhile ,The corporate debtor made payment of dues by way of settlements to operational creditor
Subsequently an application was filed by Prowess International Private Limited with the NCLT for withdrawal of the petition based on a settlement arrived at between Parker Hannifin India Private Limited and Prowess International Private Limited.
Question
Can the petition filed with NCLT w.r.t. initiation of Insolvency resolution process be withdrawn after the parties subsequently agree for settlement?
And at what stage of the such withdrawal is permitted?
Legal Provision
Sec 9(1) The Insolvency and Bankruptcy Code, 2016 and rule 8 Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
Decision
- The honorable bench of NCLT held that Corporate Resolution Process commences on admission of application filed for initiation of Resolution process by Operational Creditor and post public announcement the petition does not remain only between the Corporate Debtor and the Operational Creditor but acquires the character of Representative Suit.
- Hence the Honorable Court held that the petition cannot be withdrawn.
Date of Judgement: 29th May 2017
