# 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-01778. Kwality Industries (Bhopal) Limited initiated Corporate Insolvency Resolution Process (CIRP)…

- **Court:** NCLT
- **Order date:** 27 Feb 2020
- **Citation:** TCN-2020-NCLT-01778
- **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-20-9de28a98

## Summary

### Background

Kwality Industries (Bhopal) Limited initiated Corporate Insolvency Resolution Process (CIRP) against Lifespan Biotech Pvt. Ltd. The CIRP was admitted by the NCLT, Indore Bench at Ahmedabad. Subsequently, a settlement was reached between the Corporate Debtor and its Financial Creditors. The Committee of Creditors (CoC) approved the settlement with a requisite majority and recommended recalling the CIRP. The Resolution Professional (RP) filed an Interlocutory Application (IA 35 of 2020) under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking withdrawal of the CIRP.

## Facts

Kwality Industries (Bhopal) Limited, an operational creditor, initiated CIRP against Lifespan Biotech Pvt. Ltd. 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 IA 35 of 2020 seeking withdrawal of the CIRP under Section 12A of the Insolvency and Bankruptcy Code, 2016. The RP stated that the Corporate Debtor had settled dues with most creditors, and the CoC had approved the withdrawal. The RP also stated that the cost of CIRP was Rs. 12,73,696/-, which the applicant-operational creditor was ready to pay. The suspended management of Lifespan Biotech filed a reply affidavit

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can allow the withdrawal of the Corporate Insolvency Resolution …

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

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**Reasoning:** The court observed that a settlement had been reached between the Corporate Debtor and

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**Interpretation:** Section 12A provides a mechanism for withdrawal of CIRP if a settlement is

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**Application:** In this case, the CoC approved the withdrawal with a 90.71% majority. The court

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Kwality Industries…
- **Respondents:** Lifespan Biotech…; M/s. Lifespan…

## Timeline

- **2019-05-02 — CIRP Init…**: CIRP initiated against Lifespan Biotech…
- **2020-01-20 — CoC Meet…**: Meeting of the creditors of the Corporate Debtor company to place the settlement proposal…

## 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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