# In the matter of Dugar Housing Ltd. MA-1325 & 1326-2019 in IBA-222-2019

> NCLT judgment dated 2019-12-11. Citation: TCN-2019-NCLT-00241. The case involves a Miscellaneous Application (MA/1325/2019) filed by Prism Johnson Limited,…

- **Court:** NCLT
- **Order date:** 11 Dec 2019
- **Citation:** TCN-2019-NCLT-00241
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dugar-housing-ltd-ma-1325-1326-2019-in-iba-222-2019-93c1b983

## Summary

### Background

The case involves a Miscellaneous Application (MA/1325/2019) filed by Prism Johnson Limited, the Applicant/Operational Creditor, seeking withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against Dugar Housing Limited, the Respondent/Corporate Debtor. MA/1326/2019 was filed by M/s. Sree Sankeshwara Foundation and Investments objecting to the settlement between the Operational Creditor and the Corporate Debtor. The CIRP was initiated under Section 12A of the Insolvency and Bankruptcy Code, 2016. The parties have reached a settlement, with the Corporate Debtor agreeing to pay the amounts due in installments. The Interim Resolution Professional (IRP) has not yet constituted the Committee of Creditors (CoC).

## Facts

Prism Johnson Limited, an operational creditor, initiated CIRP against Dugar Housing Limited. Subsequently, Prism Johnson Limited filed MA/1325/2019 seeking to withdraw the CIRP based on a settlement with Dugar Housing Limited, where Dugar Housing Limited agreed to pay the outstanding amounts in installments. Sree Sankeshwara Foundation and Investments, claiming to be a financial creditor, filed MA/1326/2019 objecting to the settlement. The IRP had not yet constituted the CoC. Six creditors had lodged claims with the IRP. Sree Sankeshwara Foundation and Investments had also filed an application (IBA/236/2019) which was dismissed due to a lack of a creditor-debtor relationship, and a related matter was before the High Court of Madras. The operational creditor did not

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## Issues and analysis

### Issue 1: Whether the Tribunal can allow the withdrawal of a CIRP application under Section 12A of the …

**Ratio:** The Tribunal has the inherent power under Rule 11 of the NCLT Rules to allow or disallow

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**Reasoning:** The Tribunal acknowledged the Supreme Court's view that parties can approach the Tribunal

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**Interpretation:** Section 12A allows for withdrawal of CIRP with the approval of 90% of the CoC.

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**Application:** The Tribunal did not allow the withdrawal at this stage, as the operational

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Prism Johnson…
- **Respondents:** Dugar Housing…

## Timeline

- **2019-11-13 — Order of Au…**: Order initiating CIRP against the…
- **2019-11-16 — Paper Publi…**: Paper publication in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12 — Time-limit for completion of insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12)

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