# In the matter of LIfespan Biotech Pvt. Ltd. IA No. 35-2020 in TP 73-2019 {CP (I B) No. 317-9-NCLT-AHM-2018}

> NCLT judgment dated 2020-02-27. Citation: TCN-2020-NCLT-01785. Kwality Industries (Bhopal) Limited initiated Corporate Insolvency Resolution Process (CIRP)…

- **Court:** NCLT
- **Order date:** 27 Feb 2020
- **Citation:** TCN-2020-NCLT-01785
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lifespan-biotech-pvt-ltd-ia-no-35-2020-in-tp-73-2019-cp-i-b-no-317-9-nclt-ahm-20-7435d2e4

## Summary

### Background

Kwality Industries (Bhopal) Limited initiated Corporate Insolvency Resolution Process (CIRP) against Lifespan Biotech Pvt. Ltd. The CIRP was initiated based on an application filed by Kwality Industries, an operational creditor. The initial order for CIRP was passed on May 2, 2019. Subsequently, an Interlocutory Application (IA 35 of 2020) was filed seeking withdrawal of the CIRP based on a settlement reached between the Corporate Debtor and its Financial Creditors.

## Facts

Kwality Industries (Bhopal) Limited initiated CIRP against Lifespan Biotech Pvt. Ltd. as an operational creditor. The CIRP was admitted on May 2, 2019. Subsequently, a settlement was reached between Lifespan Biotech and its financial creditors. The Committee of Creditors (CoC) approved the settlement with a 90.71% majority. The Resolution Professional (RP) filed an application (IA 35 of 2020) seeking withdrawal of the CIRP under Section 12A of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor made payments to financial creditors, operational creditors, and other dues under a One Time Settlement (OTS) scheme. The financial creditors included Bank of India, Bank of Maharashtra, SIDBI, and Corporation Bank. Corporation Bank did not agree to the OTS. The RP

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## Issues and analysis

### Issue 1: Whether the application for withdrawal of the Corporate Insolvency Resolution Process (CIRP) under …

**Ratio:** Section 12A of the Insolvency and Bankruptcy Code, 2016, allows the Adjudicating

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**Reasoning:** The court reasoned that the CoC had approved the settlement with a 90.71% majority, which

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**Interpretation:** Section 12A provides a mechanism for withdrawing CIRP proceedings when a

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**Application:** In this case, the CoC approved the settlement with a 90.71% majority, and the

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Kwality Industries…
- **Respondents:** Lifespan Biotech…; M/s. Lifespan…
- **Advocates:** Love. S.…; Mehul A.…; +1 more

## Timeline

- **2019-05-02 — Initial CIR…**: Order passed by the Tribunal initiating the Corporate Insolvency Resolution Process…
- **2020-01-20 — CoC Meet…**: Eighth meeting of the Committee of Creditors (CoC) where the settlement proposal was…

## 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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