# In the matter of Dulichand Auto Sales Pvt. Ltd. IA(IB)No. 410-KB-2020 in CP (IB) No. 279-KB-2019

> NCLT judgment dated 2020-03-13. Citation: TCN-2020-NCLT-01562. The case involves an application filed under Section 12A of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 13 Mar 2020
- **Citation:** TCN-2020-NCLT-01562
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dulichand-auto-sales-pvt-ltd-iaibno-410-kb-2020-in-cp-ib-no-279-kb-2019-c0b3065b

## Summary

### Background

The case involves an application filed under Section 12A of the Insolvency and Bankruptcy Code (IBC) seeking to settle the matter outside the Tribunal. The Committee of Creditors (CoC) was not constituted, and publication was issued as per Regulation 6(1). The Corporate Debtor was admitted for initiating Corporate Insolvency Resolution Process (CIRP) on 2020-02-28, but the matter was settled out of the Tribunal on 2020-03-03, before the CoC could be formed. Financial Creditors, Vinod Distributors Pvt. Ltd. and Hitesh Distributors Pvt. Ltd., submitted their claims to the Interim Resolution Professional (IRP) on 2020-03-12.

## Facts

GHG Softech Ltd. was undergoing CIRP. An application was filed under Section 12A of the IBC to settle the matter outside the Tribunal. The CIRP was initiated on 2020-02-28. The matter was settled out of the Tribunal on 2020-03-03. The Committee of Creditors (CoC) was not constituted because the settlement occurred before any other claimants submitted claims to the IRP. Financial Creditors, Vinod Distributors Pvt. Ltd. and Hitesh Distributors Pvt. Ltd., submitted their claims on 2020-03-12. The IRP filed the application under Section 12A because of the settlement. The explanation provided by the IRP for not constituting the CoC was found satisfactory by the court.

## Issues and analysis

### Issue 1: Whether the application under Section 12A of the IBC for settling the matter outside the Tribunal …

**Ratio:** Section 12A of the IBC allows for withdrawal of an application admitted under Section 7,

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**Reasoning:** The court reasoned that the matter was settled out of the Tribunal before the CoC could

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**Interpretation:** Section 12A is interpreted to allow for flexibility in cases where the CoC is

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** Jinan…
- **Respondents:** GHG Softec…; Dulichand Auto…
- **Advocates:** Nirmalya Da…; Dibanat…; +5 more

## Timeline

- **2020-02-28 — CIRP Init…**: Corporate Debtor was…
- **2020-03-03 — Settlement out of…**: The matter was settled…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12A — (1) Subject to sub](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12a)

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